Sofyan denies ownership of Gemala Industries

JAKARTA (JP): Tycoon Sofyan Wanandi denied on Friday that he was the owner of Gemala Industry Ltd, which was listed among uncooperative debtors by the Indonesian Bank Restructuring Agency (IBRA).

Sofyan said in a statement that the company -- which was identified in the local media as PT Gemala Industries and PT Gemala Industries Ltd -- was majority owned by his younger brother Edward I. Wanandi, who is the company's chairman and chief executive officer.

Sofyan also said that Gemala Industry Ltd and its affiliates were not part of the Gemala Group, of which he is the chairman.

He appealed to the media and other parties not to spread misleading information about him, threatening "legal measures" against those who persisted.

IBRA named Gemala Industry Ltd on Wednesday among the 17 companies deemed bad debtors for failing to sign letters of commitment for debt rescheduling by the Aug. 31 deadline. The company was reported to have US$55.9 million.

IBRA identified the company as PT Gemala Industries Ltd; PT denotes a limited liability company incorporated under Indonesian law.

Sofyan said the use of PT was incorrect. He said that his brother previously released a media statement declaring that his company was incorporated in Ontario, Canada, not Indonesia.

"The identification of the company as PT Gemala Industries Ltd or PT Gemala Industries is misleading and has caused the perception that Gemala Industry Ltd is a company incorporated in Indonesia and is subject to Indonesian laws," Sofyan said.

Edward said the inclusion of the company on the list of bad debtors was legally flawed and damaged its reputation.

He contended that Gemala Industry, due to its incorporation in Canada, was not subject to Indonesian law.

He acknowledged that Gemala Industries obtained loans from branches of Bank Bumi Daya (BBD) and Bank Negara Indonesia (BNI) in the Cayman Islands based on loan agreements made under the laws of New York state in the U.S.

He said he informed IBRA by letter that his company had restructured its loans on Aug. 18, 1998, under new credit agreements, involving General Electric Capital Corporation as a new lender and BBD and BNI as old lenders under the laws of the U.S. state.

"Because Gemala Industries is legally bound now by the credit agreements, it cannot sign the letter of commitment and undertaking which was unilaterally set by IBRA without the prior consent of the three creditors," Edward said.

"If IBRA takes over Gemala Industries' debts to BBD and BNI, it shall be bound by the conditions of the credit agreements under the laws of New York state." (jsk)