'RI not doing enough in Manulife case'

'RI not doing enough in Manulife case'

The Jakarta Post, Jakarta

The Canadian government said on Thursday that the Indonesian
government was not doing enough to resolve the long-running legal
battle between Canadian insurer Manulife Financial Corp. and its
former local partner.

Meanwhile, over 300 employees of Manulife's local unit, PT
Asuransi Jiwa Manulife Indonesia (AJMI), staged a rally at the
House of Representatives to protest the commercial court's
bankruptcy ruling on the company. AJMI has approximately 4,000
employees.

"Fundamentally we are not satisfied to date with the response
of the Indonesian government," Canadian Ambassador to Indonesia
Ferry de Kerckhove was quoted by AFP as saying.

He said that the Manulife fiasco would be discussed by
visiting Canadian Secretary of State for Asia Pacific David
Kilgour during a meeting with Indonesian Minister of Industry and
Trade Rini Soewandi. Kilgour was scheduled to arrive here late on
Thursday.

The statement came after Vice President Hamzah Haz and
Minister of Finance Boediono said earlier that the government
would not intervene in the judicial process in the Manulife case.

Boediono also hoped that the case would not hurt relations
between the two countries.

Canada is a member of the country's major donor consortium
grouped under the Consultative Group on Indonesia (CGI), which
last year pledged some US$3.14 billion in loans to help finance
the 2002 state budget.

De Kerckhove estimated Canada was the sixth- or seventh-
largest foreign investor in Indonesia, with a total stake of
US$8.2 billion.

Asked whether Canada might seek restrictions on foreign
financial support for Indonesia if the case were not settled, de
Kerckhove told AFP, "That's too far ahead. That's too much
speculation. We are counting on the Indonesian government to help
resolve the matter."

The commercial court declared AJMI bankrupt last Thursday,
after PT Dharmala Sakti Sejahtera (DSS), Manulife's former local
partner in AJMI, filed a bankruptcy petition over dividend unpaid
in 1999.

Manulife has said that no dividend was distributed during that
period. The company has made an appeal to the Supreme Court.

The bankruptcy ruling was made despite the fact that AJMI, the
country's fourth-largest insurance firm, was a solvent company,
as confirmed recently by the finance ministry.

Manulife has been in a legal battle with the Gondokusumo
family, the founder of DSS, since it bought the latter's 40
percent stake in AJMI at a government auction after DSS was
declared bankrupt.

The purchase was immediately contested by Roman Gold Assets
Ltd., which claimed it had already bought the 40 percent
shareholding. Manulife has said that Roman Gold is a front set up
by the Gondokusumo family. The latter has reportedly been
accused of trying to defraud Manulife.

De Kerckhove told AFP that he was dissatisfied with
Indonesia's handling of the Manulife case because police did not
follow up evidence from overseas courts that showed "a clear
problem" with the Roman Gold share ownership declaration.

He also said Indonesia had done nothing in response to
repeated requests from foreign donors grouped in the CGI to grant
insurance companies the same bankruptcy protection as banks.

The ambassador called on the government to ensure that the
court-appointed receiver did not damage Manulife's financial
health while a Supreme Court appeal was pending.

Separately, protesting AJMI employees called on legislators to
put pressure on the government so that legal proceedings in the
Manulife case could be settled soon.

"We asked the legislators to look into the case carefully as
it affects the fate of 400,000 policyholders and 4,000
employees," said chairman of AJMI's employee forum A. Rachman
Saleh.