KUMPULAN Guthrie Bhd has engaged lawyers from three firms, including oneeach from Indonesia and the US, to assist in its defence against a suit byPT Adhiyasa Saranamas (PTAS) for allegedly breach of contract over salesof palm oil estates.

The three legal firms are Kartini Muljadi & Rekan in Jakarta, Foley Hoagof Washington DC and Cheong Kee Fong & Co in Kuala Lumpur.

"The move to engage counsel from the three firms was to ensure thatGuthrie's position is presented well in the suits," said a companyofficial.

The official said Guthrie will continue to adhere to its principles ofexcellence corporate governance and ethical practice, both domesticallyand internationally, and in its belief in the rule of law.

As such, Guthrie will leave the matter to the hands of the courts and willnot make further comments, while the suits are pending determination bythe courts.

"The suit by PTAS against Guthrie and the defamation suit by Guthrieagainst PTAS and Gilbert Wiryadinata are now in the hands of the courts.

It will be inappropriate for Guthrie to make further comments pendingdetermination by the courts," the official said.

It was reported last Wednesday that PTAS had filed a legal claims forUS$25.76 million (US$1 = RM3.80) against Guthrie for the alleged breach ofcontract by the Malaysian company.

However, the company did not disclose details of the contract that it hadallegedly breached.

PTAS is also applying to seize Guthrie's interests in three Indonesiancompanies as security, which can be sold though a public auction should itwin the case.

The companies are PT Salim Ivomas Pratam (in which Guthrie holds a 20 percent stake), PT Serikat Putra (21.59 per cent) and PT Guthrie PeconinaIndonesia (70 per cent).

In the first hearing held last Monday, Guthrie was granted an extensionfor its Indonesian lawyers to file a defence and to seek to strike outAdhiyasa's application to seize Guthrie's interests in the threecompanies.

Guthrie's Indonesia counsels have advised the Malaysian company to resistthe suit.

Separately, Guthrie and the group's chief executive officer Tan Sri AbdulKhalid Ibrahim have filed a defamation suit in the High Court of Malaya,Kuala Lumpur, against PTAS and one Gilbet Wiyadinata.

Guthrie had in March finalised its purchase of more than 200,000haplantation land from the Indonesian Bank Restructuring Agency (Ibra) forsome US$368 million.

The Malaysian conglomerate was said to have started payment for 25 oilpalm plantation since the signing of the agreement in Jakarta on March 31.

In purchasing these assets, Guthrie will pay Ibra US$368 million andassume outstanding debts of about 500 billion rupiah that the plantationcompanies owe to Ibra.

The plantation span 265,776ha in the Sumatran provinces, and in centraland south Kalimantan as well as central Sulawesi.

Ibra had taken control of the estates from its biggest debtor, the SalimGroup, which has more than 100 companies in its stable.

The group had owned about 53 trillion rupiah or RM23.81 billion.

The estates were later sold through a competitive bidding process in whichGuthrie emerged the winner.

The purchase, financed by a RM1.5 billion Islamic syndicated loan, wasexpected to boost Guthrie's crude palm oil production 300 per cent by theyear 2005.

20 August 2001Business Times