Small businessmen to sue tycoons for breach of promise

YOGYAKARTA (JP): Almost 200 local small-scale entrepreneurs are planning to sue the Jimbaran Group of business tycoons for breach of promise. They are demanding compensation of Rp 100 billion (US$10.5 million).

Organized by the Yogyakarta Legal Aid Institute, the entrepreneurs accused the major businesses of failing to keep their promise on June 17, 1997, to provide them with capital.

Muhammad Iqbal, one of the lawyers representing the 195 entrepreneurs, said they would first send warnings. If by the third warning the tycoons had still failed to respond, the lawsuit would be filed, he said.

The first warning letter is to be sent on Monday.

"This is just to remind the tycoons of their stated commitment to help the small businesses," Iqbal said.

The Jimbaran Group signed on June 17, 1997, a memorandum of understanding before Yogyakarta Governor Paku Alam VIII pledging to provide small entrepreneurs with capital. The memorandum said that to qualify for the money the small traders needed only to produce their identity cards, which accounted for the large number of people applying for the assistance.

It was reported at the time that Bank Danamon would organize a fund of Rp 3.7 billion (US$388,000 at the current rate) while Bank Central Asia would contribute Rp 126 million.

"Not one of the small entrepreneur has received any of the promised assistance," Iqbal said, adding that if they succeeded with the lawsuit, Rp 50 billion of the compensation would be distributed to the plaintiffs while the rest would be donated to the government's effort to overcome the current economic crisis.

The other lawyers involved in the planned lawsuit were Edi Saputra Sofyan, Kamaludin Hasibuan, and H. Khaerudin.

The Jimbaran Group was set up in August 1995 in Jimbaran, Bali, after a two-day meeting of 100 leading Indonesian business figures. At the time, they vowed to narrow the economic gap separating them from their smaller counterparts.

During the course of its existence, the group's "partnership" has included offers of support in the fields of human resources, capital, market access and information. (23)