President orders halt to Manulife investigation

President orders halt to Manulife investigation

JAKARTA (JP): President Abdurrahman Wahid ordered on Monday
the Attorney General's Office to terminate the investigation on
the criminal suit against PT Manulife Asuransi Jiwa Indonesia
(AJMI), a subsidiary of a major Canadian insurance company.

The President said the case not only damaged Indonesia's
relations with foreign creditors but also ran against national
interests.

"Therefore, I have asked the police and the Attorney General's
Office to immediately return Manulife's assets, and issue an SP3
(a letter terminating a case)," the President said after he
inducted several Indonesian ambassadors, including Ekky
Syahruddin, among others, as the new ambassador to Canada.

He hoped the termination of the case would improve Indonesia's
relations with Canada, which the President said was an
influential member of the International Monetary Fund (IMF).

What is worse, he said, AJMI is 9 percent owned by the
International Finance Corporation (IFC), which is the commercial
arm of the World Bank.

Although neither institution has officially linked its loan
programs to the Manulife case, their senior officials often use
the case to illustrate Indonesia's slow progress in legal reform.

"So, it has become clear that relations between nations now
are affected by matters like this," he said.

The Manulife case centers around the disputed sale of a 40
percent stake in AJMI to its Canadian parent company,
Manufacturing Life Insurance (Manulife).

Manulife bought the 40 percent stake for Rp 170 billion
(US$14.8 million at the current rate) to raise its stake to 91
percent in AJMI.

The shares belonged to PT Dharmala Sakti. They were auctioned
off after the company was declared bankrupt by the Central
Jakarta Commercial Court.

The proceeds of the sale were to be used to repay loans to
Dharmala's' creditors, including the Indonesian Bank
Restructuring Agency (IBRA).

However, British Virgin Island-based company, Roman Gold
Assets, intervened and claimed to be the rightful owner of the
shares.

Failing to stop the sales, Roman filed a criminal suit against
AJMI, on charges of forging the shares certificates.

Despite an intensive investigation by the police, the case
never made it to the prosecutor's office due to lack of evidence.

Roman's legal representative, Denny Kailimang criticized the
termination of Manulife's case, saying it smacked of foreign
intervention.

According to him, the case's termination brings legal
uncertainty into the country.

Denny also warned he would file a civil lawsuit against
Manulife, and share auctioneer PT Balai Lelang Batavia, on
charges of having conducted an unlawful auction.

He argued that Manulife won the auction by forging the shares,
while the original ones were already sold to Roman.

But as the police forensic test was unable to determine the
original shares, he said, samples of the shares should have been
tested in more advanced laboratories overseas.

"All they (police) needed to find out was which one was issued
first and for what reason the second one was issued. The
prosecutors should focus on the criminal aspect of the case," he
said.

But according to the President, the existence of two identical
shares, or duplicates, is normal in business.

"It (the share) is not false, but it is a duplicate just like
an agreement which has a duplicate," he explained.(bkm/bby/dja)