Unilever faces bankruptcy suit

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.