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inority shareholders in the diversified manufacturing company Texmaco Group plan to file a lawsuit against the government for alleged mismanagement after taking over the company in 2000.

The government took over Texmaco after the group defaulted on loans from several state banks during the 1997-1998 Asian financial crisis. The government controls some 70 percent of the group, with the remaining shares held by previous owners.

Owner and former company president director Marimutu Sinivasan said the government had reneged on its commitments on necessary facilities and assistance in order to salvage the company from total bankruptcy.

“We need a clear settlement on the case so that the company can operate,” Marimutu told reporters in Jakarta on Friday.

Texmaco’s history is unique in its relation to ties with the New Order regime. The company, which used to produce textiles and garments, textile machinery, machine tools, synthetic fibers, rototillers and trucks — was granted an export credit worth US$750 million from banks in 1997-1998 after the intervention of late former president Soeharto, who issued a letter to exempt Bank BNI from the legal lending limit requirements to disburse the credit.

Without political backing after the fall of Soeharto, then state enterprises minister Laksamana Sukardi revealed that Texmaco executives had misused export credits.

Marimutu was named a suspect in 2006 in the alleged bank lending scam and was briefly on the list of the Interpol’s wanted list. He was later acquitted of all charges.

At the Friday press briefing, Marimutu said that uncertainties regarding the settlement of the export credit case had also degraded Texmaco’s asset value, while at the same time its debt had bubbled, making it more difficult for the government to sell the company at a reasonable price through a tender.

He pointed out that based on an audit by the Development and Finance Surveillance Agency (BPKP) in May 2000, Texmaco’s debt was recorded at Rp 8 trillion ($888 million), while its total assets were valued at Rp 16.2 trillion.

In addition to that, Marimutu said that since its assets had been managed by the Indonesian Bank Restructuring Agency (BPPN) — now replaced by PT Perusahaan Pengolaan Aset (PPA) – the firm could not access bank financing, even though the privilege was guaranteed by the Master Restructuring Agreement signed by BPPN and state-owned Bank BNI.

The agreement says the bank can provide trade financing for Texmaco to import raw materials and intermediary goods necessary for production, as well as distribute revenues from local commerce as well as export sales as the source of debt payments.

“We really want to get the agreement implemented,” he said, adding that the inability to obtain credits for its working capital had hampered, for example, its automotive arm, PT Texmaco Engineering, to fulfill overall orders from buyers. In the past, Texmaco has supplied around 150 combat vehicles for the Indonesian Military (TNI).

PPA had repeatedly tried to sell Texmaco to private investors but failed to find a suitor.

The Defense Ministry has repeatedly requested the government transform the company into a full-fledged state-owned company, citing the company’s technological knowledge and manufacturing facilities that could benefit the military.

The Finance Ministry, however, said it had doubts over the possibilities and referred to an audit from state Research and Development Agency BPPT, showing the equipment — which will be among the assets auctioned — was outdated for such a purpose.

PPA’s corporate secretary Renny Rorong did not reply The Jakarta Post’s requests for any response to Marimutu’s statements.

Lawmaker Harry Azhar Azis said the House of Representatives Commission XI overseeing financing would schedule a special session to mediate between the government and other Texmaco owners to settle their dispute.

“First of all, we need to evaluate whether the collateral included in the settlement matches the asset market values. If they do not match, then there is something wrong,”