Unilever faces bankruptcy suit

A'an Suryana, The Jakarta Post, Jakarta

Consumer goods manufacturing giant PT Unilever Indonesia is being sued for bankruptcy by PO Parma Djaja, a Makassar-based land transportation company.

Parma Djaja filed a bankruptcy petition on Monday with the Jakarta Commercial Court on the grounds that Unilever had failed to fulfill its debts with the transportation firm.

The case is scheduled to open next Monday in court.

According to the bankruptcy petition, a copy of which was made available to The Jakarta Post, Parma Djaja filed the petition after Unilever unilaterally terminated a long-term contract with the firm in October 1998.

Parma Djaja claimed that there was no substantial reason for Unilever to terminate the contract, and that the unilateral decision was unfair.

The company said that because of the contract's termination, Parma Djaja suffered some Rp 10.2 billion (US$1.15 million) in financial losses, which included a future potential profit and transportation fees that Unilever was supposed to pay between 1997 and 1999.

Parma Djaja was Unilever's partner in transporting its consumer products in the Makassar region.

Separately, Unilever said that it had strong reason to terminate the contract.

Unilever corporate secretary Franky Jamin said that several of the company's distributors had frequently complained about the Parma Djaja's poor performance.

"Unilever issued several warnings to PO Parma Djaja, but did not receive a response. So now, they suddenly file a (bankruptcy) lawsuit," Franky told the official Antara news agency.

Meanwhile, the bankruptcy petition forced the Jakarta Stock Exchange (JSX) authorities to temporarily suspend the trade of Unilever shares. The shares were initially suspended at 10:22 a.m., but the suspension was lifted at 1:34 p.m, after the bourse received clarification from the company, which said that the lawsuit was baseless.

Unilever Indonesia started its operation in this country in 1934, and listed its shares on the Jakarta Stock Exchange in 1982. Some 85 percent of the company's stake is controlled by Maatschappij Voor Internationale Bellengginge, which is based in Rotterdam, while the remaining 15 percent is held by public investors.