of buying Indonesian assets'
Following conflicting claims to the purchase of a stake in an
insurance firm, Canada tells investors to think twice before buying into
CANADA'S trade ties with its largest Asean partner Indonesia have
suffered a blow as Ottawa has asked local companies to think twice before
buying up assets of their troubled business partners in Indonesia.
'Although we are not discouraging Canadian companies from investing in
Indonesia, we want them to use caution when purchasing assets that are put
up for sale under the Ibra and the Ministry of Finance,' said Mr Reynold
Moiron, a spokesman for the Canadian Department of Foreign Affairs and
Ibra stands for the Indonesian Bank Restructuring Agency.
Canadian officials have been irritated recently over what Mr Moiron
called as 'unacceptable harassment' of the employees of the PT Asuransi
Jiwa Manulife Indonesia, a Canadian-Indonesian joint venture that has run
into trouble after a British Virgin Islands-based firm complained of a
share certificate forgery.
When Jakarta did not respond to Ottawa's attempts to get the issue
settled, Canada intervened at the highest level.
Prime Minister Jean Chretien sent a letter to Indonesian President
Abdurrahman Wahid, but Mr Moiron said he was unaware of any reply from
The issue in question is whether the 40 per cent stake in PT Manulife
Indonesia, that was bought recently by the Canadian insurance giant,
Manulife Financial Corporation (MFC) for US$20 million (S$35 million) from
the now-bankrupt PT Dharmala Sakti Sejahtera insurance firm, is legal.
The late October purchase, through a government-sanctioned auction,
increased MFC's stake in the Manulife Indonesia to 91 per cent.
However, soon after the MFC purchase, Roman Gold Assets of British
Virgin Islands claimed it had bought the same stake a week earlier from a
Samoa-based company for US$50 million. It also complained that share
certificates had been forged.
The complaint landed Adi Purnomo, senior vice-president of Manulife
Indonesia, in jail, where he was held without charges for three weeks
before being released recently.
However, Mr Moiron said it was too early to say if Canadian investors
would see the Manulife crisis as a sign of poor investor security in