Manulife resumes business in Indonesia

Staff and wires

JAKARTA, Indonesia -- The Jakarta Commercial Court has appointed a new receiver to the Indonesian unit of Canada's Manulife as it re-opened for business Thursday.

Manulife Indonesia was forced to close its doors last Friday after the life insurer was declared bankrupt on June 13 and its original receiver Kalisutan ordered it to cease business.

Manulife Indonesia successfully sought a new receiver, claiming Kalisutan was not independent. The court appointed Syarif Bastaman in his place.

Thursday's court move marks another twist in a commercial dispute that has spooked potential investors and looked at one point to threaten relations between Indonesia and Canada.

Partners fall out

At the heart of the dispute is a falling out between Manulife and its former partner in Indonesia, the ethnic Chinese tycoon Suyanto Gondokusumo.

After Gondokusumo's Dharmala group hit financial trouble during the 1997-98 Asian financial crisis, his unit that held a 40 percent stake in Manulife Indonesia -- Dharmala Sakti Sejahtera (DSS) -- fell into bankruptcy in 2000.

In October 2000 Manulife bought that stake for $20 million.

It was the receiver of DSS who filed the bankruptcy petition against Manulife Indonesia.

No conflict of interest

Presiding judge Hasan Basri told the Jakarta Commercial Court that Syarif Bastaman said in a letter to the court that he was independent and had no conflict of interest, Reuters news agency reported.

Shortly before the ruling, Kalisutan read a lengthy statement to the court, saying he had resigned as receiver and later denied to reporters all allegations against him.

"The controversy surrounding this bankruptcy case has distracted us from doing our job as a receiver," he told the court, according to Reuters.

When asked by reporters about allegations he was not acting independently, he said: "Of course we are independent."

Manulife Indonesia was declared bankrupt by the Commercial Court for failing to pay 1999 dividends. It has assets worth 3.1 trillion rupiah ($356.7 million) and posted a 75.5 billion rupiah net profit last year.

The company has since appealed this ruling to the Supreme Court.

Under laws introduced in 1998, any firm with more than one unpaid debt can be declared bankrupt by a commercial judge.