Gemala refutes inclusion on debtor list
JAKARTA (JP): Gemala Industries Ltd. disputed on Friday its inclusion on a list of 26 uncooperative debtors issued by the Indonesian Bank Restructuring Agency (IBRA), saying the ruling was legally flawed and damaged its reputation.
Gemala Industries chairman and chief executive officer Edward Wanandi said IBRA's rating of the firm showed complete disregard for legal points of contention which were clearly explained in his letters to the agency on June 16 and June 18.
IBRA's classification of uncooperative debtors covered those who failed to sign letters of commitment and undertaking to restructure their debts under conditions set by the agency. In IBRA's announcement on Thursday, Gemala Industries was listed as an uncooperative debtor with Rp 238 billion in liabilities.
"We have clearly explained in the letters that Gemala Industries Ltd. is a company incorporated and based in Ontario, Canada, and therefore is not subject to Indonesian laws," Edward stated in a letter of protest to IBRA deputy chairman Eko Santoso Budianto on Friday.
The IBRA list inaccurately identified PT Gemala Industries Ltd; PT denotes a limited liability company incorporated under Indonesian law.
He confirmed that Gemala Industries obtained loans from the branches of Bank Bumi Daya (BBD) and Bank Negara Indonesia (BNI) in the Cayman Islands based on loan agreements made under the laws of New York State in the U.S.
"But as I explained in my June 16, 1999, letter to IBRA, which was supported with the necessary legal documents, Gemala Industries restructured its loans on Aug. 18, 1998, under new credit agreements involving General Electric Capital Corporation as a new lender and BBD and BNI as old lenders. Gemala Industries also has paid part of its debts under the new credit agreements which were made also under the laws of New York State," Edward said.
"Because Gemala Industries is legally bound now by the credit agreements, it cannot sign the letter of commitment and undertaking which was unilaterally set by IBRA without the prior consent of the three creditors."
He added that Gemala Industries would be forced to default on its debts if it signed the letter of commitment as demanded by IBRA without prior consent of the creditors.
"If IBRA takes over Gemala Industries' debts to BBD and BNI, it shall be bound by the conditions of the credit agreements under the laws of New York State," Edward said.
He appealed to IBRA to thoroughly study legal aspects of a classification before making public statements because "the wrong judgement has damaged our credibility".(vin)