'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.