Tutut sues 11 banks for loan delay

Tutut sues 11 banks for loan delay

JAKARTA (JP): The eldest daughter of former president Soeharto
Siti Hardiyanti Rukmana, also known as Mbak Tutut, is demanding
that 11 local banks pay her company US$55 million in compensation
due to a delay in the disbursement of loans.

"The disbursement failure has incurred some losses to PT Citra
Samudera Terminal Peti Kemas," said the company's lawyer Gousta
Veriza on Tuesday after the third hearing of the company's suit
against the banks at the South Jakarta District Court.

The trial was postponed until May 23 to allow verification of
the evidence.

PT Citra Samudera Terminal Peti Kemas, owned by Tutut, won in
early 1997 a contract to carry out part of the expansion work of
state port operator PT Pelindo III's terminal in Surabaya, East
Java.

Later in the year, the 11 banks agreed to extend a syndicated
loan of $75.5 million to Citra Samudera to finance the project.

Some $2.9 million of the loan facility was disbursed during
the early part of construction.

The next loan disbursement to the company was put on hold in
January 1998 due to the unstable monetary condition, during which
the rupiah fluctuated wildly against the U.S. dollar.

The bank syndication was led by Bank Niaga. The other member
banks were Bank Internasional Indonesia, Bank Bumi Daya, Bank
Bank Pembangunan Indonesia, Bank Pelita, Bank Danamon, Bank
Bukopin, Bank Panin, Bank Rama, Bank Universal and Bank Tiara.

Citra Samudera claimed the delay inflicted the company with
$3.5 million in losses and the cancellation of the project.

In addition, Citra Samudera claimed it also lost a future
income opportunity of some $51 million by not completing the
project.

Citra Samudera filed the legal suit in mid-1999.

The trial did not start until now due to the difficulty of
notifying the 11 defendants, as many of them are no longer in
business.(udi)