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.