WestLB AG Managing Director Paul Edwards in a special interview in Singapore, Wednesday night (09/01/2010), explained the issuance of the Certificate of Deposit (CDs) was driven by demand from Nomura, the bank under the laws of England, which at that time was looking for a bank who are willing to support them in structuring a CD.
According to Paul, the publication of the CD was considered commercially reasonable, and the CD was later sold to Nomura which at that time represented a client whose identity is not known by WestLB.
"WestLB did not know how and when Century Bank became the holder of the CD when the CD is then held and traded through Euroclear without involving WestLB," he said.
When the CD is due on 30 September 2008, said Paul, WestLB to pay 26 million dollars in cash to the holders of the CD which turned out to Century Bank.
At the time payment is made through Euroclear and the existence of Century Bank as holder of the CD is not known by WestLB.
Should be, said Paul, it is not making payments in cash, but give the Medium Term Notes (MTN) Nomura, who previously was associated with CD, worth 26 million U.S. dollars.
"Conditions of the CD only allows a settlement through physical delivery of the MTN Nomura. There is no provision for payment in cash. Payment by cash is not supposed to happen and there have been errors in payment," said Paul.
Paul said that in January 2009, WestLB realized the mistake when there is a failure of completion of the second MTN Nomura. Internal investigation and then begins to trace the holders of the CD, which turned out to Century Bank.
Then said Paul, various attempts were made to obtain these funds restored, but the Century Bank refused to cooperate.
WestLB then appoint law firms to assist communication with Century Bank, with a view to reach agreement to resolve this matter without going through the litigation process.
lawsuit Bank WestLB With Bank Mutiara filed in the Central Jakarta District Court with registration number No.26/Pdt.G/2010/PN.JAK.PST case.
Mutiara Bank had refused if the lawsuit was filed in the Central Jakarta District Court, but on Wednesday (26/05/2010), in the decision she interrupted, the Central Jakarta District Court judges consisting of Jupriyadi (chairman), Herdy Agusten and Tjokorda Suamba Rae, states court is authorized to accept the lawsuit filed by WestLB on the grounds the defendant was in Indonesia.
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