Indonesian Parliament Resists Foreign Intervention in Manulife Insurance Dispute

Strategic Insights -

The Indonesian Parliament has assured that it will not allow foreign parties to intervene in a long-standing dispute between PT Dharmala Sakti Sejahtera (DSS) and PT Asuransi Jiwa Manulife Indonesia (AJMI) over a bankruptcy suit. The dispute has its roots in 1999, when AJMI failed to pay dividends totaling Rp22.3 billion plus interest to DSS, leading to a court declaration of bankruptcy in 2002. The case has sparked strong protests from Manulife's head office in Canada and has been appealed multiple times, with the Supreme Court initially annulling the verdict before AJMI demanded compensation of Rp164 billion from DSS.

Key Takeaways:

  • The Indonesian Parliament has vowed to resist foreign intervention in the dispute between DSS and AJMI, following a call by Vice President Hamzah Haz to refrain from interference.
  • AJMI, a joint venture owned 40% by DSS, 51% by Canada's Manulife Financial, and 9% by the International Finance Corporation, was declared bankrupt by a court in June 2002.
  • The joint venture's failure to pay dividends totaling Rp22.3 billion plus interest to DSS in 1999 led to the bankruptcy declaration.
  • AJMI appealed the court verdict with the Supreme Court on July 1, 2002, but the decision was annulled, sparking speculation of foreign pressure.
  • On June 17, 2004, AJMI filed a suit with the Central Jakarta Court to demand compensation of Rp164 billion from DSS.
  • The Central Jakarta district court has adjourned the session until July 26, awaiting a response from Manulife.

Statistics:

  • Rp22.3 billion: The amount in dividends that AJMI failed to pay to DSS in 2002.
  • Rp10.4 billion: The interest accrued on unpaid dividends.
  • Rp164 billion: The compensation demanded by AJMI from DSS.
  • 40%: The ownership stake of DSS in AJMI.
  • 51%: The ownership stake of Canada's Manulife Financial in AJMI.
  • 9%: The ownership stake of the International Finance Corporation in AJMI.
  • June 13, 2002: The date the court declared AJMI bankrupt.
  • July 1, 2002: The date AJMI appealed the court verdict with the Supreme Court.
  • June 17, 2004: The date AJMI filed a suit with the Central Jakarta Court.

Sources:

  • (ANTARA), "Indonesian Parliament to Let No Foreign Party Intervene in Manulife Insurance Dispute", July 26, 2004.
  • (Asia Pulse), "Indonesia's House of Representatives: No Foreign Intervention in Manulife Insurance Dispute", July 26, 2004.