Indonesian unit of major U.K. insurer Prudential has been allowed to resume operations after the supervisory judge on its bankruptcy case issued a ruling. PT Prudential Life Assurance was shut down Monday after the Central Jakarta Commercial Court Friday declared it bankrupt due to its failure to pay a fee to a former consultant, Lee Boon Siong.

Lee sought $40 million in damages from Prudential Life after the country's leading investment-linked insurance company terminated an agent recruiting and training contract with him in late 2003. The court ruled Lee is owed $400,000.

Prudential’s lawyer Cemby Hutapea, however, said Prudential offices in the country remained closed Friday as the company is waiting for formal notification from the supervisory judge.

Quoting ADB statement, Bloomberg columnist Andy Mukherjee said that Prudential case would add another heavy task for the Indonesian government, as the country must attract $150 billion in investments over the next decade to create enough jobs for the 40 million people who are unemployed.

He added that focus should be made to the 1998 bankruptcy law. Based on the law, a company is broke if it has one mature and unpaid debt. Such creditor-heavy provision was created at the behest of the IMF which insisted on protection of creditor rights as a condition for its $4.8 billion bailout package at the time of the Asian crisis.

Prudential argues that Lee Boon Siong, the consultant, was asking for $40 million, 100 times the amount the company estimates it owes him. (mma)