Multipolar sues Wal-Mart Inc. for $98.8 million

JAKARTA (JP): Publicly listed retailer PT Multipolar Corporation is suing its U.S. partner, retail giant Wal-Mart Store Inc. and its executives, for financial losses worth US$98.8 million for improper business practices.

Controlled by tycoon Mochtar Riady of Lippo Group, Multipolar and its two subsidiaries -- PT Multipolar Perkasa and PT Inka Prima Mulia Sejati -- also asked West Jakarta District Court yesterday to order the defendants to pay nonmaterial losses of US$100 million.

The firm's lawyer, Hotman Paris Hutapea, said Wal-Mart allegedly mismanaged its joint venture with two Wal-Mart stores here, issued misleading budgets, manipulated data inventory and intentionally arranged financial claims and invoices.

"The defendants, for instance, presented a marked-up budget and engineered tens of billions of rupiah in financial claims," the plaintiffs said in a statement of claim, which Hotman read to the court.

The plaintiffs also asked the court to immediately issue an order banning 12 expatriate Wal-Mart managers from leaving the country.

The expatriates had allegedly approved each others' expense claims and were throwing money around on excessive entertainment and personal spending for various items, ranging from airline tickets to hotels, children's school fees to sports equipment to a dog carrier, the statement said.

The court was also asked to order Wal-Mart to continue operating the two joint-venture stores at Lippo Supermal in Karawaci, Tangerang, and Megamal Pluit in North Jakarta until local employees could take over operations at the supercenters, the statement said.

Multipolar also asked the court to order Wal-Mart to hand over all files, documents and accounts related to the joint venture because the U.S. company had threatened to leave the country and take or destroy all the documents, it said.

Multipolar signed a joint venture agreement with Wal-Mart on Aug. 16, 1995 to open stores here using the Wal-Mart name with Multipolar supplying capital of $20 million for each store.

The plaintiffs said Wal-Mart had violated the agreement by taking over the overall management of the supercenters which had resulted in the stores suffering losses.

"Wal-Mart should have only given technical assistance as stated in the agreement," the statement said.

All Wal-Mart violations had been uncovered by public accountancy firm Hans Tuanakotta and Mustofa, it said.

Wal-Mart lawyers and executives could not be reached for comment.

Presiding judge Andar Purba adjourned the trial until April 23 as Wal-Mart may need time to discuss the case with its U.S. headquarters. (jun)