JAKARTA - Cedrus Investments Limited (Cayman Island Company) filed a law suit against PT Kustodian Sentral Efek Indonesia (KSEI)) related to the freezing of collateral shares unilaterally and illegally by PT Kustodian Sentral Efek Indonesia (KSEI) without authority.
Cedrus Investments Limited, is the creditor of Harun Abidin, a debtor, who borrowed money in accordance with a signed loan agreement. Abidin agreed to provide a number of shares of PT Cakra Mineral Tbk (CKRA) to be used as collateral against money loaned to him by Cedrus.
Subsequently when Harun Abidin failed to pay his debt, the collateral shares transferred to Cedrus Investments Limited. Without performing any due diligence or exercising ordinary reasonable caution, PT Kustodian Sentral Efek Indonesia (KSEI) locked the shares without legal authority making them unavailable for Cedrus to use and thereby causing Cedrus irreparable damage.
PT Kustodian Sentral Efek Indonesia (KSEI) unlawfully and without explanation intercepted the share collateral legally and rightfully belonging to a foreign investor in violation of the rule of law and the procedure.
As a result of the arbitrary, capricious and unlawful action of PT Kustodian Sentral Efek Indonesia (KSEI) in unilaterally freezing of Cedrus Investments Limited, property Cedrus Investments Limited has been unable to access these shares to cover the debt which the debtor Harun Abidin failed to pay thereby causing huge financial losses for Cedrus Investments Limited.
Furthermore, a direct and proximate result of PT Kustodian Sentral Efek Indonesia's (KSEI) unlawful and irresponsible action may be an adverse impact on the Indonesian financial industry, particularly the banking sector as PT Kustodian Sentral Efek Indonesia's (KSEI) action raises the potential for the loss of confidence and trust by foreign investors towards the banking system in Indonesia.
Moreover, PT Kustodian Sentral Efek Indonesia's (KSEI) action contravenes the policy announced by President Joko Widodo that Indonesia is currently seeking to improve the ranking of the country to ease investment in Indonesia and in the eyes of the international world – Jefferson Dau, Lawyer of Cedrus Investments Limited quoted, in Jakarta 24 January 2017. (df)