Property firm faults IBRA for illegal action

Property firm faults IBRA for illegal action

JAKARTA (JP): A relatively small property firm called PT Geria
Wijaya Prestige (GWP), which owns the Kuta Paradiso Hotel on the
resort Island of Bali, has faulted the powerful Indonesian Bank
Restructuring Agency (IBRA) for a legal violation.

GWP president Harijanto Karjadi said on Wednesday that IBRA
had violated the law by trying to seize his hotel over a US$17
million debt with the now defunct Bank PDFCI because the Supreme
Court ruled on Sept. 22 that all disputing parties must not take
any legal action pending the issuance of a Supreme Court verdict.

Speaking in a press conference, Harijanto said that IBRA was
not in a position to take legal action against his company
because the debt was with PDFCI which was already merged into
Bank Danamon, and GWP has fully repaid its debt as shown in a
report issued by Bank Danamon.

"If IBRA declines to fulfill the demand of GWP within 14 days,
GWP will file suit for the losses caused by the infamy," said
company legal advisor Jimmy Hermawan, pointing out that the
action taken by IBRA, including the issuance of a press release
mentioning that the agency would seize the GWP assets, had
discredited the company and the hotel.

Jimmy suspected that certain ex-officials of PDFCI now in
senior positions at IBRA and Bank Danamon had designed a scenario
to enable them to take over Hotel Paradiso, located in the prime
area of Bali's famous Kuta beach and having a high occupancy
rate.

He called on the newly appointed IBRA Chairman Edwin Gerungan
to probe certain former officials of PDFCI now working at IBRA
and Bank Danamon for the alleged misconduct.

The nationalized Bank Danamon is controlled by IBRA. The
agency manages some Rp 260 trillion (US$27 trillion) worth of bad
debt transferred from the country's ailing banking sector.

But Jimmy said that the GWP debt was not part of the bad debt
transferred to IBRA.

Many of IBRA's recent decisions have been controversial
because they have been perceived as benefiting top conglomerates
which thrived during the 32-year era of former authoritarian
president Soeharto.

"IBRA has been unfair to small companies like us," Jimmy said.

He said that GWP had to bring its case against powerful people
at IBRA to the House of Representatives to seek support. He said
that GWP officials had met with House Speaker Akbar Tandjung and
House commission II on legal and human rights affairs.

GWP borrowed $17 million from a bank syndication led by Bank
PDFCI on November 28, 1995.

Jimmy said that the maturity of the debt was seven years
including a 24-month grace period starting Nov. 28.

But he said that PDFCI demanded GWP to fully repay its debt
six months ahead of schedule, and because the company could not
fulfill the demand, the bank filed suit at the Denpasar court in
Bali in April 1998 demanding for liquidation of the hotel via
auction.

Jimmy said that GWP fought back by filing suit against PDFCI
at the Jakarta court and the Denpasar court. He said that the
company won the case in both courts as well as at the higher
courts.

He said that the case was currently awaiting the verdict of
the Supreme Court.

Surprisingly, IBRA issued a letter on Oct. 11 to the police
chief in Bali to help the agency seize the Paradiso Hotel,
despite the Supreme Court ruling.

"This is clearly a legal violation. IBRA is creating legal
uncertainty by such action," Jimmy said. (rei)