Govt calls for rapid review of Manulife ruling
Govt calls for rapid review of Manulife ruling
Fitri Wulandari, The Jakarta Post, Jakarta
In a latest bid to appease international anger over a
controversial bankruptcy ruling against the Indonesian unit of
Canadian insurance giant Manulife Financial Corp., the government
has urged the Supreme Court to rapidly review the ruling.
Minister of Finance Boediono said that he was concerned by the
commercial court's interpretation of corporate law.
"Their decision potentially places every Indonesian public
company at risk. Thus I hope that the supreme court will rapidly
review the commercial court's decision," Boediono said at an
economic seminar on Friday.
Meanwhile, a source told The Jakarta Post that some member
countries of Indonesia's major donors consortium grouped in the
Consultative Group on Indonesia (CGI) had separately sent letters
to President Megawati Soekarnoputri to protest the bankruptcy
ruling.
The Commercial Court ruled PT Asuransi Jiwa Manulife Indonesia
(AJMI) bankrupt on June 13 in a controversial decision that has
strained relations between Canada and Indonesia, and further
damaged investor confidence in the country due to legal
uncertainty.
Manulife appealed to the Supreme Court earlier this week. It
is still not clear when the Court will make a decision, although
according to the law it must come up with a verdict within six
weeks of the appeal being lodged.
While admitting that legal reform should be undertaken,
Boediono said investors should not be daunted with the current
situation.
"As disappointing as it is, I do not expect that the damage
created by the Manulife situation will be as great among
Indonesian entrepreneurs or even resident foreign investors as
among those considering coming to Indonesia," he said.
He added that the government would make every effort to
deliver on its promise of good policy.
The bankruptcy ruling was made after a receiver of the now
defunct PT Dharmala Sakti Sejahtera (DSS), Manulife's former
partner in AJMI, filed a lawsuit over unpaid dividends in 1999.
Manulife has said that shareholders did not authorize any
dividend payment at the time.
The Ministry of Finance, however, has acknowledged that AJMI
is a solvent company.
The Ministry of Justice and Human Rights have launched an
investigation over the alleged bribery in the Manulife bankruptcy
ruling.
On Thursday, the Commercial Court granted a new receiver for
AJMI following protests from the company which accused the first
court-appointed receiver of bias due to its links with DSS,
saying he intended to ruin the company.
After it was shut down for six days, AJMI -- the fourth
largest insurance company in Indonesia with a 10 percent slice of
the national insurance industry -- resumed operations on
Thursday.
Canada has strongly protested the bankruptcy decision.
Analysts said that the ruling, which was another controversial
decision by corruption-riddled courts, would scare away foreign
investors.