IFC suspects voting fraud
JAKARTA (JP): The International Finance Corporation (IFC), a subsidiary of the World Bank, might lose a bankruptcy petition against publicly listed PT Panca Overseas Finance (POF), due to what the IFC suspects as fraudulent voting by fictitious creditors.
IFC legal representative Luhut M.P. Pangaribuan, who spoke on behalf of the company, said the IFC would lose its bankruptcy case against POF, if the Jakarta Commercial Court proceeded with the creditors' voting next week.
"We suspect that the voting on Monday (next week) will be attended by fictitious creditors voting against the bankruptcy," Luhut told The Jakarta Post on Thursday.
The IFC, he said, filed the bankruptcy against POF in September last year, after the latter failed to pay US$13 million in matured debts to the IFC.
Besides the IFC, 17 other foreign creditors supported the bankruptcy petition against the POF, which has a total matured debt of $67.24 million, Luhut said.
But two months after the bankruptcy petition was filed, the POF gave the court a list of 14 new creditors with debts amounting to Rp 1.6 trillion (about US$168.42 million).
According to Luhut, the 14 new creditors had expressed their agreement on a proposed 10-year debt restructuring plan, under which the POF was to pay only 10 percent of total debts incurred.
Under the 1998 Bankruptcy Law, a company survives a bankruptcy petition, if the majority of creditors - representing at least two-thirds in value of the debtor's outstanding debts - vote for accepting the company's debt restructuring proposal.
But, failure to gain a majority vote, would cause the POF to be automatically declared bankrupt.
"We'll be outnumbered by fictitious creditors," Luhut said, and claimed the bankruptcy law contained serious loopholes.
He said the IFC had hired a private investigator to examine the validity of these new creditors.
The POF, he said, obtained the fresh loans on July 10, 2000, based on a syndicated loan agreement led by Hong Kong firm, Harvest Hero International Limited.
The IFC's research, he said, found several irregularities in the companies that channeled the loans, and the process under which the POF obtained them.
Inquiries in Hong Kong revealed that Harvest Hero had no permits to engage in international lending activities.
The company did not own a telephone line, and the company's only employee was its director Oen Robin Ilmuwan, he said.
"We found out that the director was actually a Soto Mie (chicken soup) seller in one of the shops in Kelapa Gading," Luhut added.
He said that the remaining companies, mostly based in West Samoa and the Bahamas, were also suspected to have no permits for channeling international loans.
"They are, what is called a paper company; useful for various purposes," he said.
The Capital Market Supervisory Agency (Bapepam) also questioned the loans, as it should have been made under the approval of POF's shareholders.
POF executives were, however, not available for immediate comment.
The IFC, Luhut said, had already requested the court to examine the validity of the 14 creditors, but the court rejected the IFC appeal, and ordered instead to move forward the voting date from Feb. 15 to Monday Jan. 15.
He added that the IFC and the 12 initial creditors planned to walk out during the voting process.
The POF is a member of the Panin Group and is 50.5 percent owned by PT Panincorp, 22 percent by PT Panin Investment Enterprises Ltd and 6 percent by the IFC.(bkm)