Supreme Court to annuls Hutama Karya verdict

Supreme Court to annuls Hutama Karya verdict

JAKARTA (JP): The Supreme Court is set to save state-owned
construction firm PT Hutama Karya from liquidation by annulling
on Friday its earlier verdict that declared the company bankrupt.

Hutama Karya corporate secretary Widodo Alibas said here on
Sunday he had known the Supreme Court's decision but could not
disclose its details because the verdict would not be released by
the Court until Monday.

"I am obviously happy about the Supreme Court's decision. I
hope this new development will correct the image of Hutama Karya
in the eyes of our foreign clients and partners," Widodo told The
Jakarta Post.

Minister of Public Works Rachmadi Bambang Sumadhijo said he
also had been informed on the Supreme Court's decision on Hutama
Karya.

"Yes, I have heard about the Supreme Court's decision
accepting Hutama Karya's petition for a judicial review. I'm
happy about it," he said.

Hutama Karya, one of the country's major construction firms,
is under the supervision of the Ministry of Public Works.

The company filed a judicial review late last month against a
bankruptcy ruling issued by the Supreme Court in February.

PT Jaya Readymix and PT Primacoat Lestary brought a bankruptcy
claim against the Hutama Karya last December for the state
company's inability to repay Rp 2.3 billion (US$265,000) in
construction fees.

Their bankruptcy petition against Hutama Karya was rejected by
the Jakarta Commercial Court on the grounds that the state firm
did not have any direct debt obligations to the two private
construction firms.

The plaintiffs appealed the decision to the Supreme Court.

Widodo said Hutama Karya won the Supreme Court's review
decision after the company settled its debt with Primacoat
Lestary, totaling Rp 283.3 million, leaving Jaya Readymix the
only unpaid creditor.

According to the 1998 bankruptcy law, for a company to be
declared bankrupt, the bankruptcy petition must be filed by at
least two creditors and the company must be proven to have failed
to service both the principal and interest of its debt to one of
the creditors.

A source familiar with the legal procedures at the Supreme
Court said the Court would overrule earlier bankruptcy decisions
only if new evidence was presented or if it found substantial
misapplication of the bankruptcy law in the case.

When reviewing bankruptcy decisions, the Court's chairman
appoints a different group of Supreme Court judges to sit on the
review panel, the source said.

"It is most likely that Hutama Karya, in filing a judicial
review to the Supreme Court, presented new evidence in the form
of proof of payment to Primacoat," the source told the Post.

In another bankruptcy case, the Supreme Court would most
likely also overrule its earlier decision taken in February and
declare publicly listed agriculture food producer PT Dharmala
Agrifood bankrupt.

The new decision would favor the International Finance
Corporation-- a subsidiary of the World Bank--ING Indonesia Bank
and publicly listed Bank Niaga, which filed a bankruptcy petition
against Dharmala over its failure to repay $53.8 million in loans
from the plaintiffs.

A senior administration official at the Supreme Court said the
Court had issued review verdicts on four out of six bankruptcy
cases which were filed for judicial reviews.

"We will officially send the judicial review verdicts on the
four cases to the Jakarta Commercial Court on Monday," he told
the Post.

The four cases include those of Dharmala and Hutama Karya as
well as a bankruptcy petition filed by state Bank Expor Impor
Indonesia against PT Pacific International Finance. (02)