'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)