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)