http://thejakartaglobe.com/business/clients-vow-to-see-indonesias-bakrie-life-in-court/342000
November 16, 2009 Yohanes Obor Clients Vow to See Indonesia's Bakrie Life in Court With Bakrie Life missing deadlines in October and November to pay interest on Rp 350 billion ($37.5 million) owed to customers of its Diamond Investa product, some of the insurer's clients said they would go to court next month to recover the debts. "We have decided to take legal action against Bakrie Life at the South Jakarta District Court in December," Wahjudi, leader of the Customer Funds Rescue and Return Group, told a news conference on Monday. No court date has been set. The group, which represents about 70 of the 400 customers who put their money into Diamond Investa, on Saturday hired lawyers to handle the case, Wahjudi said. He added that the legal team would discuss the case on Friday with the House of Representatives Commission XI, which oversees finance, as well lawmakers from the Indonesian Democratic Party of Struggle (PDI-P). "We have sought support from the president. Now we will find support from the House and finally go to court," Wahjudi said, adding that the case against PT Asuransi Jiwa Bakrie, the formal name of Bakrie Life, would undermine the public's trust for the insurance industry. He said the legal team would petition the court to order an audit of Bakrie Life to determine whether it could pay its debts, as well as to probe possible criminality on the part of the firm's management. Wahjudi said the group had sent a letter to President Susilo Bambang Yudhoyono last month, leading the head of state to order the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) to investigate. "To our knowledge, Bapepam-LK has not responded to the president's directive. We believe the Finance Ministry should set up an investigation team because it has more independence than Bapepam," Wahjudi said. The regulator has said that it would no longer intervene in the case, leaving the matter to Bakrie Life and its customers. "Bakrie Life's management only makes false promises. Bakrie group has enough money to buy Newmont stake, but we are hurting because Bakrie has not repaid us," Wahjudi said. Timoer Soetanto, Bakrie Life's president, said on Monday that the insurer would pay the interest for October and November this week. "The management is preparing all documents regarding the restructuring of payments, including adjusting administration issues such as correction of interest payments," said Timoer, as quoted by detik.com, on Monday. Bakrie Life did not respond to the Jakarta Globe's requests for comment on Monday. Diamond Investa was an in vestment-life insurance vehicle that promised returns of up to 13 percent along with life insurance coverage worth up to Rp 1 billion. The product's prospectus stipulated that 90 percent of investor funds would be invested in bonds, with the rest being divided between time deposits and stocks. Instead, it turned out that about 70 percent of the investors' money was invested in equities, some of which were Bakrie group stocks. Wahjudi said 80 percent of the funds had been invested in shares. Redemptions were halted by the company after the stock market plummeted last October. According to the debt restructuring deal Bakrie Life said it had reached with most of its clients in October, the company would pay 25 percent of the debt next year, another 25 percent in 2011 and the remainder in 2012. [Non-text portions of this message have been removed]
