RI govt and central bank sued for $58.59 billion

NEW YORK (Reuters): The Republic of Indonesia, along with its central bank, its export-import Bank Exim and other agencies and banks, are targets of a US$58.59 billion breach of contract lawsuit, filed Monday in U.S. Federal court in Manhattan.

The plaintiffs in the suit are a Channel Islands-based investment group, Group of BA Ltd., and its principal, Gustaff Daniel Parengkuan.

They charge that they entered an agreement with Indonesian investment corporation PT Tiga Muriya Sejati, under which PT Tiga would provide $100 million to an investment program to be administered by the Group of BA.

It said Bank Expor Impor Indonesia (Bank Exim) agreed to act as conduit for the $100 million, but that the funds were not passed on to Group of BA as agreed and instead held by the Indonesian government.

The defendant list includes Chase Manhattan Bank, which the complaint says is holding a portion of the funds in its Bank Indonesia's account.

Burchetta Brofman & Hanley, New York City attorneys for the plaintiffs. Representatives of the Indonesian banks could not be immediately reached for comment.

The complaint seeks compensatory damages of $8.59 billion and punitive damages of $50 billion. The compensatory damage claim is based on what plaintiffs said was a settlement agreement between the Indonesian government and Group of BA that was not honored.