Summarecon claims US$9m losses from dispute

Summarecon claims US$9m losses from dispute

JAKARTA (JP): PT Summarecon Agung chairman Soetjipto Nagaria
said yesterday that his questioning by police was not related to
the illegal demolition of a building project in the Tanjung Duren
area, West Jakarta, or corruption and embezzlement of funds as
reported by the mass media last week.

"I have instead lost US$9 million in equity capital put in PT
Swaraeka Prasetia, the owner of the building project, on Feb. 9,
1994," Soetjipto said in a statement.

He said Swaraeka Prasetia was set up on Feb. 4, 1994 -- as a
joint venture between PT Summarecon Agung, PT Surya Dewata and PT
Atiga Swakerta -- to continue a shopping center project which
later became the center of a dispute between shareholders.

Soetjipto made the statement to clarify print media stories
last Friday which quoted National Police spokesman Brig. Gen.
Da'i Bachtiar as saying that three company executives, including
himself, were arrested on charges of illegal destruction of a
building, corruption and embezzlement of loans from state Bank
Rakyat Indonesia.

Soetjipto recounted that Alie Santoso, the owner of PT Surya
Dewata, asked Summarecon to become a shareholder in the shopping
center project, Centerpoint, in early 1994 after Surya Dewata
failed to complete the project even though it had withdrawn
US$13.12 million and Rp 16 billion in loans from Bank Rakyat
Indonesia in 1992. The loans were secured by the almost three-
hectare plot of land on which the project was built.

However, Taylor Thomson Whiting Indonesia, hired as a
consultant for the project, concluded after a study in May, 1994,
that the structure of the building project was not technically
feasible for a shopping center.

Swaraeka Prasetia's shareholders then agreed on Aug. 10, 1994,
to change the project into an apartment building and the change
was duly notified to Bank Rakyat Indonesia, according to
Soetjipto.

"The original building project was demolished in October,
1995, under the supervision of Alie Santoso. However, we later
were embroiled in a dispute over how to proceed with the
financing of the project."

He said the shareholders then decided to sell the project's
29,315-square-meter block of land to repay loans to Bank Rakyat
Indonesia and hired Colliers Jardine and Knight Frank as the
valuer and marketing agent.

"But Alie Santoso later changed his mind and did not agree to
the land sales. Suddenly, Summarecon was summoned on March 15,
1997 by the president of PT Surya Dewata, Irvan Gading, to settle
the dispute."

Soetjipto said he never knew Irvan Gading because PT Surya
Dewata had always been represented by Alie Santoso as the main
shareholder.

Irvan proposed that Summarecon pay $11 million to Surya Dewata
if it withdrew as a shareholder from PT Swaraeka Prasetia,
Soetjipto said.

"Obviously we flatly turned down this groundless request."

He added that Bank Rakyat Indonesia had actually handed over
the collection of Swaraeka Prasetia's debts of $22.97 million to
the State Receivership Agency on Feb. 16, 1998. (vin)