IBRA wins major bankruptcy case for first time

IBRA wins major bankruptcy case for first time

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
for the first time won a bankruptcy case after the Jakarta
Commercial Court declared on Thursday PT Landasan Terus Sentosa
of the Ongko Group bankrupt for its failure to repay a Rp 270
billion matured debt, a lawyer said.

Presiding Judge Syamsudin Manan Sinaga said Landasan Terus had
failed to prove to the commercial court its good faith,
cooperativeness and consistency.

"They admitted they owed the debts and submitted a debt
restructuring proposal at the last minute to the commercial court
after they bluntly denied the existence of such debts in the
earlier court hearing," Syamsudin said.

"The (commercial) court see their debt restructuring proposal
as merely a ploy for buying time," he added.

Andrey Sitanggang, the lawyer representing IBRA, added
Landasan Terus clearly did not show its good faith as the terms
and conditions contained in their debt restructuring proposal
were beyond any reasonable logic.

"They want their debts rescheduled for a 30-year period, and
during the first five years of which, they are free from paying
interest payments and principal repayments," Andrey said.

Andrey said such a proposal would breach a standard of any
normal banking practice, thus, it should be highly doubted
whether they were serious about the proposal.

Andrey said the proposal did not qualify being called a
proposal which stood on a basis of good faith.

"They were just testing the commercial court," he added.

Syamsudin said there were cases in the commercial court where
the debtor (bankruptcy petitionee) tried their luck finding a
loop hole in the Bankruptcy Law so that they could avoid being
declared as bankrupt.

"They initially fought in court, trying to refute that they
owed debts, but upon realizing their failure they quickly asked
the court to allow time for negotiations with their creditors on
a debt restructuring program," he said.

Syamsudin said such strategies had to be prevented by the
commercial court from happening to keep business integrity alive
in this country.

In two separate cases at the commercial court, judges Hasan
Basri and Untung Haryadi approved two other Ongko Group business
units, PT Indoland -- with matured debts amounting to Rp 3.3
billion and PT Citra Mahkota Abadi -- Rp 103.2 billion (also
being filed for bankruptcy by IBRA) to have more time to
negotiate debt restructuring programs with their creditors.

There were altogether four Ongko Group companies facing
bankruptcy suits by IBRA in early July. Another company, PT
Mustika Niagatama Nusantara with Rp 82.5 billion in matured
debts, will have its fate decided by the commercial court next
Tuesday.

In filing such bankruptcy suits, IBRA acted on behalf of Bank
Mashill, Bank Bali and Bank Danamon which provided the loans to
the four companies.

Bank Mashill was one of the banks closed by the government
following massive bank runs in early 1998. Bank Bali and Bank
Danamon were placed under IBRA management after their
shareholders failed to repay their obligations to the government.

IBRA, in addition the above mentioned companies, has filed
bankruptcy suits with the commercial court against eleven
uncooperative debtors.

Other companies in default are PT Tirtamas Comexindo, PT
Westkalindo Pulp Papermill, PT A Latief Corporation (out-of-court
settlement), PT Ometraco Corporation, PT Sumi Asih, PT Perusahaan
Dagang Ometraco and PT Mahadjaja Gemilang.

IBRA currently controls about Rp 220 trillion of bad debts
transferred from domestic banks. In addition, the agency controls
about Rp 600 trillion in assets transferred from former bank
owners and closed banks.(udi)