Enmity with no end between Indah Kiat & Debenture Holder
Indah Kiat versus Debenture Holder

Dispute between the debenture Holder and PT Indah Kiat Pulp & Paper is getting crowded. Head of District Court Bengkalis Indah Kiat have ordered the debenture holder to immediately fulfill the Obligations.

Obligation to be due for the debenture holder was US$ 485,731 million. Stipulation letter No. 01/Somasi/2003/PN BKS dated on November 5, 2003 and was signed by Head of District Court Bengkalis Tani Ginting, have asked parties from Indah Kiat to fulfill the obligations in 8 days after stipulation.

The stipulation itself refers to the request of the demand letter from BT Partnership Law Firm as an attorney in facts of PT Mizuho Bank Indonesia, parties who are assigned by the debenture holder as collateral agent, to District Court of Bengkalis dated November 4, 2003.

Bank Mizuho as collateral agent have proposed a demand letter deed of Agreement No.236 dated on 24 June 1994 made by Notary Winanto Wiryomartanti, signed by both parties as Bank National Association.

Bank America National Trust Company – trustee those, debenture holder of Indah Kiat International Finance Company (debenture publisher) PT Indah Kiat Pulp & Paper Tbk (guarantor).

According to Rahmat Bastian from BT Partnership, stipulation from District Court of Bengkalis is more likely as warned and ordering parties from Indah Kiat in fulfilling their obligation which was to be due on 1999 dan 2002. “Court as legislation have rights to execute warning and ordered parties which was considered of neglecting the obligation. If still neglected therefore will be determine by security of execution, said to Bisnis.

As known court have not yet release stipulation of execution attachment to Indah Kiat.

Where as letter of petition was already listed to District Court of Bengkalis since October 9, 2003.

Rahmat hope, in the mean time court will submit the stipulation, since being warned /ordered by parties of the debenture publisher as well as guarantor have not yet settlement the debt.

There won’t be any choices for court, except to submit letter of stipulation execution guarantee. Certainty was based on article 227 KUH Civil Procedure.”

It is an obligation to process the deed execution guarantee because there isn’t any debt payment. “We have evidence of notes, published by affiliated company of Indah Kiat which was already being due.”Said head of court.

If this is not heeded by Indah Kiat, Rahmat clearly said, his client will submit claim bankruptcy.

We haven’t use process of law because there is still other certainty of law. There is still considerate. Because if, bankruptcy is used, meaning petition of demand letter to court won’t be as simple as it seem.

He was hoping the awareness of parties’ debenture publisher to fulfill the obligation before using process of law.

Advocates also have reminded, payment must be done according to the exact time and according to the obligation, can increase the enthusiasm of foreign investor to invest their assets in Indonesia.

“We also have asked government to give legal protection for foreign investor, especially legal action for local businessman who considered of being dishonest in fulfilling their obligation,” said Rahmat.
If not so, according to Rahmat, foreign investor will avoid this country, which gave an impact to the Indonesian economy.

Claim in reconvention

At the mean time Hotman Paris Hutapea as attorney in facts for Indah Kiat, explained, District Court Bengkalis refused the request from Mizuho Bank.

Stipulation dated on 5th November 2003 was summon, but there is other stipulation refusing the request, submitted by court before Ramadhan”, said Hotman Paris, he also said that he hasn’t receive the stipulation.

Hotman also said, Asia Pulp & Paper (APP) have requested a claim with total amount US $350 million to the debenture holder, who proposed a petition of security attachment to Indah Kiat. The reason of confiscating the assets belong to Hotman’s client, estimated was not base on good intensions.

According to Hotman, his clients have no relation of debt with Mizuho Bank as collateral agent, and so with the debenture holder who requested a petition of security attachment, Indah Kiat feels they don’t have any obligation of paying the debt.

The debenture holders are a hit and run investor to us, who only seeks for benefit. It was proven, they were never been involved in Master of Restructuring Agreement (MRA), including negotiation of debt restructuring AAP Indonesian Unit,’ says Hotman Paris.

He also explain action requesting petition of security attachment to his clients would be an unlawful act. That is why Indah Kiat confisticate the parties.

Perceiving to Hotman statement, Rahmat Bastian explained parties haven’t heard of stipulation of rejection from Court of Bengkalis.
“If so we would have been told. There are no reasons for district court to accuse or canceled its own stipulation. Action of it would be court authority, said Rahmat Bastian”.

He also refuses his clients of not having any relation of debt with Indah Kiat. Because every agreement made has been signed by every parties.

Meaning, trustee, collateral agent, debenture publisher and guarantee of an agreement have confessed of the existing obligation.

Notes

The enmity, according to the stipulation request, petition of security attachment dated on 7 October 2003 (listed 9 October 2003 court register) proposed by BT Partnership Law Firm to the District Court of Bengkalis, started from the published notes (debenture) of indah Kiat International Finance Company B.V. (IKIFC) and Indah Kiat as guarantor.

Guarantee mortgage have made foreign investor desiring the debenture. Requesting from other law firm among them Oaktree Capital Management L.L.C, Gramercy Advisor L.L.C and others
As clan agent and on behalf of fund ownership.

Debenture ownership, is still requesting, affirmed by deed of agreement or indenture on June 29 1994 signed by both parties.

State in the agreement, payment according to the exact time, both debt and interest. Be due for debenture among are 1999, 2002 clan 2006.

While mortgage guarantee which was use related to debenture, form of moveable asset and not moveable asset owned by guarantor. Among them HGB 14/Pinang Sebatang (266,33 ha) and HGB No. 15/Pinang Sebatang (139,35) all located in Kel. Pinang Sebatang, Bengkalis, Riau. Including factory structure.

As the agreement of notes according to petitioner, publisher of notes have done. Debt be due and must be pay.

As the deed of debt, debenture holder through collateral agent have asked trustee (Bank national association) to inform the debenture publisher regarding payment of debt.

Trustee, several of times have sent a letter to the debenture publisher and guarantor to accelerate the payment of debt. However on 27 June 2003 debenture holder received a letter from trustee, clarifying breach of contract.

Base on deed of hypothec No. 35/S/2/VI/1994 date 29 June 1994 made by notary Budiono in Dumai, clarify if breach of contract occur, rights of the debenture holder has to be fulfill or be done.

As the agreement made by parties, have said, debenture holder have rights to mortgage objects guaranteed by the guarantor. And according to No.4/1996 about mortgage rights state action is justified.

According to breech of Contract, Mizuho Bank as Collateral Agent have proposed a petition and admonish to the debenture publisher and guarantor in order to settlement the payment, also determine an attachment of execution upon object of guarantee.

Legal Defect

Meanwhile Hotman Paris Law Firm in his comments have said his rejection towards the petition, with fifteen reasons regarding with debt of his client to the debenture holder.

His first reasons to his clients were never of having any debt with Mizuho Bank, knowing Mizuho Bank was only as collateral agent. “No companies have confessed as creditor who is also requesting for a petition of attachment.”

Because petitioner is not as creditor, therefore petition of attachment upon hypothec is legal defect. And action can only be done only by creditor or power of attorney with letter of specific power of attorney.

He also mentioned, deed of Hypothec No. 35/S/2/VI/1994 dated 29 July 1994 and certificates Hypothec No.918 dated 1 July 1994 was proven to be legal defect.

As In deed of hypothec above, was not state the name of the real creditor, and mistaken mentioned borrower was PT Indah Kiat Pulp & Paper, whereas the company wasn’t the borrower.

Beside, petition attachment requested by Bank Mizuho was premature and against article 1831 jo 1832 Indonesian Civil Court.

Indah Kiat says, they never gave an agreement of guarantee to petitioner attachment as collateral agent, but rather security asset to Bank of America National Trust Company.

In this matter as Hotman says Supreme Court obligates a specific power of attorney from owner securities as resolution of cassation from district court requires a valid specific power attorney from a valid owner, as if cassation resolution from Supreme Court matter of bankruptcy No. 21K/N/2003 dated on 27 August 2003.

Because of legal defect and other reason, Indah Kiat have asked District Court of Bengkalis to reject the petition attachment and petition of demand letter requested by Mizuho Bank.