Prudential may resume operations

Abdul Khalik, The Jakarta Post, Jakarta

The judge appointed by the commercial court to supervise the PT Prudential Life Assurance bankruptcy case decided on Friday to let the company resume operations after it was closed down on Monday by its controversial court-appointed receiver.

The lawyer for Prudential, Ricardo Simanjuntak, said that the decision was made to maintain the value of the company's assets while at the same time protecting the interest of policyholders and employees. The decision by the commercial court is currently on appeal to the Supreme Court.

"Today, we hope the company can serve its policyholders, who need health services, and its employees, who must get their salaries on time," said Ricardo.

He told The Jakarta Post that the judge's decision showed that the receiver, a lawyer appointed by the court to safeguard the assets of the company, made a mistake by rushing to close down Prudential without proper understanding of the company.

According to Law No. 4/1998 on bankruptcy, the bankrupt company loses its rights to manage its assets and a receiver is assigned with authority to take care of all of its assets, even though an appeal may have been lodged with a higher court.

However, the same law stipulates that the receiver has to get a permit from the supervising judge to be able to close down the company's operation.

Ricardo reiterated his demand that the receiver, Yuhelson, be removed from his position and replaced by another more competent lawyer.

Yuhelson told the Post that he had not been informed about the decision to let Prudential resume operations. He said that he would not be held responsible if the value of the assets decreased because of continuing operations under a bankrupt status.

"If they want to resume operations, then they should consult with me. As a receiver, I am the one that has the authority to manage the assets because the company has been declared bankrupt. If the board of directors initiates company activities, we will not be responsible," said Yuhelson.

He complained that he was still having difficulties meeting with the directors to arrange a transfer of assets.

"This is an insult to the law. Actually, we intended to report them to the police yesterday. But now, we must prepare more evidence and a better strategy before reporting them," said Yuhelson.

On the progress of the case, Ricardo said that he had submitted all the documents needed for an appeal, but the process might take several weeks before the Supreme Court's decision was handed down.

"We insisted on resuming operations because it will take a week before the appeal can be processed by the Supreme Court and 30 days before they issue a ruling. More losses will be incurred if we stop operations that long," he said.

The commercial court declared Prudential bankrupt last Friday after a former agent/consultant, Lee Boon Siong, filed a suit on April 7, accusing the company of failure to pay him bonuses, and demanding compensation of about Rp 366 billion (US$44 million). The court decided on April 23 that Prudential should pay $400,000 and declared it bankrupt.