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India demands immediate release of Polaris chief

Shobha Warrier in Chennai

India on Wednesday demanded the immediate release of Polaris Software Labs chief Arun Jain and a senior company official Rajiv Malhotra detained in Jakarta since Saturday over a commercial dispute, while assuring Indonesian authorities that if required for questioning they would make themselves available.

Intervening at the political level, External Affairs Minister Yashwant Sinha spoke to his Indonesian counterpart Hassan Wirayuda on Wednesday evening and conveyed to him 'very strongly that the two gentlemen should be released immediately,' foreign office spokesman Navtej Sarna told reporters.

For the second time in two days, Indonesian Ambassador to India Zakaria Soemintaa Tmadja was summoned to the foreign office where Secretary Abhyankar expressed India's 'urgent concern' that this case should be resolved as soon as possible.

Jain and Malhotra were detained in Jakarta on charges of alleged deception and fraud over an agreement with Bank Artha Graha. Jain is CEO of the Chennai-based Polaris Software, while Rajiv Malhotra is the head of the Bankware division of the company.

Sources said Jain's wife, Manju, has taken her husband's detention with equanimity and is at the Polaris office trying for his release. Rajiv Malhotra's young wife, who is pregnant, is quite upset with the turn of events.

On Tuesday, the Indonesian Ambassador was called to the South Block and, according to Polaris, some Indonesian officials visited the company's Chennai office 'to take note of the situation as it happened from our (Polaris) perspective.'

With the central government taking so much interest in the release of Arun Jain and Rajiv Malhotra, the mood at the Polaris office is one of optimism. "We are very, very optimistic. We are thankful to the central government for having extended their support through the Embassy. We hope the issue will be resolved soon. Our legal counsel and the Indian embassy in Jakarta are working hard to resolve this issue as soon as possible," he said.

Polaris Software had signed agreements with Bank Artha Graha in June 2002 and August 2002 in which Polaris were to deliver three modules of Bankware product covering central processing, disaster recovery and branch server related work. The project was to continue till July 3, 2003.

"But the clients became unhappy about certain milestones in the project implementation. They sent a termination notice to us. So Arun wrote to them that he would like to visit personally and sort out the issue. They accepted it and called him to Jakarta."

Arun Jain went to Jakarta with senior executives in-charge of the software development project for the bank. After the discussion on December 13, all the four executives were detained at the bank's premises.

"We got the news about their forcible detention from Arun himself on Friday afternoon. But at the time, they didn't think they would be arrested and taken to the police station. We alerted the Indian embassy there immediately thereafter."

They were detained till evening inside the bank but by then, two gentlemen from Polaris were permitted to go. Then, the bank handed over Arun Jain and Rajiv Malhotra to the police who have kept them in a small cell. It was then that the Polaris officials decided to seek the Indian government's help.

"We didn't want to make it a public issue, as it would become an issue between two countries; but then we realised that this could happen to any Indian businessman anywhere. As a public limited company, we thought we owe it to our stakeholders to inform them of the current situation too," Balakrishnan explained.

According to him, initially the "poor hygiene and non-availability of vegetarian food at the jail made life difficult for Jain."

"After he was moved to a cleaner cell, he felt much better. He wants to get out of there as quickly as possible and get back to business. He did not sound distraught, but is frustrated because of what has happened," he said.

Balakrishnan said: "There has been no fraud committed by Polaris Software. The issue on hand is a commercial one, governed by a contract signed under Singapore laws with an option for arbitration only under Singapore laws. So, the issue has to be settled in Singapore, a neutral country. In this context, the detention in Indonesia (under Indonesian law) clearly violates the terms of the contract."

He hoped the issue would be sorted out soon.

Additional inputs: PTI

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