Tuesday, Dec 31, 2002
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By Our Special Correspondent
CHENNAI, DEC. 30. The abrupt and ugly end to its alliance with Bank Artha Graha of Indonesia is expected to have a visible fallout on the balance sheet of Polaris Software Lab in the final quarter of the current financial year. Both at the meeting of the shareholders of the company and in his informal interactions with presspersons later today, the Chairman and Managing Director, Arun Jain, indicated that Polaris might have to write off the money it had obtained from the Indonesian bank for implementing the assigned project and the consequential legal expenses to fight the arbitration case. Polaris, it may be recalled, had received so far $662,000 from the bank for a $1.3 million project. Mr. Jain had informed presspersons upon arriving here on Tuesday last that the money received from the bank had already handed over the Indian embassy in Jakarta. The write off move would surely impact the bottom line of the company in the current quarter. Earlier in the day, the board met to take stock of the events that triggered Mr.Jain's arrest by the Indonesian police in Jakarta upon complaints by the head of Bank Artha Graha. The board felt that the case was `clearly a commercial dispute' between the Indonesian bank and Polaris and that it did not qualify as a `criminal dispute'. The board also decided that Polaris should initiate arbitration proceedings against the bank in Singapore as prescribed by the contract for commercial disputes. Simultaneously, it wanted the company to move legally in Indonesian courts to quash any criminal charges contemplated against Polaris and its officials under the local law. A release from the company said Polaris would also contemplate all other legal actions vis-a-vis its case with the bank. The board also appointed a legal panel headed by Arvind Kumar, a director of the company, to supervise and co-ordinate legal actions arising out of the arrest of Mr. Jain and his colleague. During the day, a court-convened extra-ordinary general meeting of the shareholders gave its nod to the proposal to merge OrbiTech, a Citigroup venture, into the company. The voting was done through a ballot. There was only a lone negative vote by a shareholder for the merger.
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