Supreme Court rejects Bank Papan appeal

JAKARTA (JP): The Supreme Court has upheld Jakarta Commercial Court's decision to reject an attempt by Bank Papan Sejahtera to have PT Semen Cibinong declared bankrupt.

In a verdict issued on Tuesday, the Supreme Court said that the appeal had been turned down because the management of Bank Papan, which has been closed down by the government, were not in a position to issue powers of attorney given that the bank's assets are now under the control of the Indonesian Bank Restructuring Agency (IBRA).

IBRA took over the management of Bank Papan on Feb. 27. The bank was closed on March 13 after its major shareholders failed to inject fresh funds to improve the bank's capital adequacy ratio.

Bank Papan filed a bankruptcy petition against Semen Cibinong in early March after the company failed to repay loans amounting to $8.6 million which fell due between June 30 and Oct. 1 last year.

On April 1, the commercial court rejected Bank Papan's petition on the grounds that the bank no longer had valid power of attorney.

Lucas, Bank Papan's lawyer, said that he respected the Supreme Court's decision, but demanded the central bank and IBRA clarify exactly when the assets of Bank Papan and 37 other banks closed down by the government were transferred to IBRA control.

"If the assets were transferred to IBRA's control on the day of the bank's closure, which was March 13, then the bank's power of attorney is valid. If that is the case we will seek a civil review because it would change the picture considerably," Lucas told The Jakarta Post on Friday.

For a civil review to be accepted by the Supreme Court, claimants have to show significant new evidence or a serious misapplication of the law.

Hotman Paris Hutapea, the defendant's lawyer, said the case was straightforward.

"I have said that Bank Papan's power of attorney was invalid from the first hearing at the commercial court," he said.

He questioned why Bank Papan had used IBRA's power of attorney at the appeal while arguing that the previous power of attorney (held by the bank) was still valid.

"There is an inconsistency there. I think by submitting to IBRA's power of attorney, the bank proved that its previous power of attorney was invalid," he added. (udi)