'Preauction vital' for optimum optimum auction results

'Preauction vital' for optimum optimum auction results

JAKARTA (JP): The government has advised auction petitioners
intending to sell assets publicly through auctions to conduct
preauction activities to get optimum results, the Ministry of
Finance said on Thursday.

Hadiyanto, the head of the legal and public relations bureau
at the ministry said preauction activities included preparing the
assets to be auctioned and relevant documents, protecting the
assets and maintaining their value, assessing the floor-price
limit professionally and marketing.

"Preauction activities which are not maximum may cause
dissatisfaction among various parties and which are often
directed at the State Auction House," he said in a statement.

The State Auction House (KLN) is effectively the sole
organizer for nonvoluntary public auctions in Indonesia.

He said canceling or delaying a public auction was under the
authority of the asset owners.

"KLN will only conduct an auction based on demand from asset
owners or auction petitioners," he said.

He also said that KLN would reject an auction petition if the
requirements were not fulfilled, including if petitioners or
asset owners failed to show authentic proof that they had the
right to auction the assets.

"A cancellation of a scheduled auction (already publicly
announced) can only be made by the petitioner. If, for instance,
a debtor had paid his obligations or following a court order," he
said.

Hadiyanto said that private auction houses could assist in
preauction activities, and organize a voluntary public auction,
but could not serve as a debt collector or a receiver in a
bankruptcy case.

He added that nine private auction houses had been given
licenses and had formed the Indonesian Auction Houses
Association.

KLN is expected to get busier when the government starts to
auction a large number of assets confiscated from 16 liquidated
banks in November, and if the number of debtors declared bankrupt
by the country's commercial court soars.

The commercial court, which was launched in August and has so
far handled 10 bankruptcy petitions, has not yet declared any
bankruptcies.

The Ministry of Finance said the annual turnover of auctions
organized by KLN soared to Rp 900 billion (US$10 million) over
the past two years, compared to an average of Rp 108 billion per
annum previously. (rei)