Sofyan denies report of Gemala Group bad debt

JAKARTA (JP): Sofyan Wanandi, chairman of the Gemala business group, yesterday denied allegations of the group's involvement in bad debt, saying that the reputation of the group has been tarnished by the reports of the Republika daily newspaper.

"We're sorry that we have to terminate our deal with the state-owned Bank Bumi Daya and work with foreign banks rather than being charged with indecent assertion," Sofyan said in a press conference here, which was attended by more than 50 reporters, including those for foreign agencies.

Parni Hadi, the chief editor of Republika, however, told The Jakarta Post in a telephone interview yesterday that the paper had no intention of tarnishing the image of the Gemala Group.

"We didn't intend to tarnish it. We are prepared to give him the rights to answer," Parni said, adding that the principle of balance reporting had been implemented by the newspaper over the case.

Republika, which belongs to the Indonesian Moslem Intellectual Association (ICMI), and other local media reported that Gemala Group was involved in a US$150-million bad debt with the New York-chapter of Bank Bumi Daya.

Unethical

Government officials, including State Minister of Investment Sanyoto Sastrowardoyo, and a number of legislators, were quoted as saying that it is unethical and unpatriotic to use the loans from an Indonesian bank for foreign investment.

Gemala Group, in cooperation with the Japan-based Yuasa battery manufacturer, purchased the London-based Exide Batteries in 1988, which turned out to be in trouble due to the long recession in Europe.

In a bid to save the business, Gemala Group decided to restructure the financial structure of its subsidiary by merging it with the U.S.-based Exide Corporation, the biggest battery industry in the world which produces 32 million batteries per annum.

Sofyan also denied that the group's debt from Bank Bumi Daya reached $150 million, saying that the debt is only $30 million.

"It's worth noting that the money we borrow has been collected from deposits of American people, not Indonesian people," he added, referring to allegation that he is not a patriot.

Sofyan, an Indonesian of Chinese descent, said that financially there is nothing wrong with the performance of Gemala Group.

He, however, said that he had decided to repay all of its borrowing from Bank Bumi Daya following allegations that the group had bad debts.

"Our image is tainted by Republika," he said, responding that he declined to give further comments, "I'm too emotional to answer all questions."

Parni, whose paper reported the case intensively, said that Republika had tried to write balance reports and had earlier sent a letter asking for an exclusive interview with Sofyan.

"So far we have got no answer," he bluntly said.

He added that on its July 21 issue, the paper published Sofyan's statement. (09)