Shareholders sue Toba Pulp over $140m money transfer

Apriadi Gunawan, The Jakarta Post, Jakarta

Three shareholders of publicly listed pulp producer PT Toba Lestari are suing the company for Rp 25 billion (about US$2.8 million), on charges it transferred out US$140 million without notifying them.

The three shareholders feel Toba Lestari deceived them, legal representative Eri Hertiwan of Buying Nasution & Partners said on Wednesday.

Eri is representing shareholders Djoko Santoso, H.N.D. Murdani and Danny Suwaradhani, who together own a 0.78 percent stake in Toba Lestari.

"The transfer of $140 million is certainly a significant amount. But during the shareholders meeting the company did not disclose this matter," Eri said, referring to the Toba Lestari annual shareholders meeting in November 2001.

He said the capital market law required a publicly listed company to inform shareholders and investors of significant material transactions.

During the initial hearing of the suit on Wednesday, judge M.S. Sitohang advised the two sides to try and reach an out of court settlement.

Eri said the shareholders would welcome a settlement offer from Toba Lestari, adding they "even plan to come to Jakarta and talk about the kinds of settlements the company might offer".

Toba Lestari lawyer Anwar said the company was looking forward to reaching an out of court settlement.

The next court hearing is scheduled for July 24.

The lawsuit is not the only problem facing Toba Lestari. Once known as Inti Indorayon Utama, the company is surrounded by a community with which it has been locked in an acrimonious dispute over pollution charges.