GALLANT Venture has issued another statement on the lawsuit its subsidiaries face in Indonesia, in which it 'maintains that the suit is frivolous, vexatious and has no legal merits'.

The statement, released yesterday, relates to a claim that Indonesian company PT Raflesia Matrawisata filed in April 2006 against two of Gallant's subsidiaries, PT Buana Megawisatama (BM) and PT Bintan Resort Cakrawala (BRC), and a third company, PT Bintan Lagoon Resort (BLR).

PT Raflesia is suing for the return of 963,353 square metres of land on the northern shore of Bintan Island - the bulk of which Gallant's units have claimed they own - and about S$10 million in damages.

In a seeming explanation as to why Gallant did not disclose the lawsuit before The Business Times carried the news in a report last week, Gallant said yesterday that its subsidiaries were given details of the suit only after Gallant registered its initial public offer prospectus in April 2006.

In any event, it added: 'The Gallant group maintains that the prospectus does not contravene the legal requirements and that it has met the applicable legal requirements.'

Gallant also said it has no adverse financial exposure to the lawsuit because its substantial shareholder Parallax Venture Partners XXX Ltd (PVP) has confirmed that it will indemnify Gallant in full for any losses or damages as a result of this suit.

It said BM and BRC will continue to 'vigorously defend' the suit as they are named defendants, but that all costs incurred by them will be borne by PVP.

Gallant also said the damages claim by PT Raflesia 'is for alleged loss of rental income for land with an area of 115,080 square metres, on which the Bintan Lagoon Resort Hotel is located'.

Gallant said there is no basis for PT Raflesia to make the claim against the group because 'the hotel and the buildings on the said land are owned by PT Bintan Lagoon Resort, which is not part of the Gallant group'.

The statement gave a detailed historical background on how Gallant group came to own the land which it has said rightfully belongs to it. Gallant has said it has titles to 863,353 sq m of the 963,353 sq m of land in dispute. The balance of 100,000 sq m is the subject of dispute between PT Raflesia and BLR.

Gallant's statement said its subsidiaries 'properly obtained title to the land from the Indonesian government' and that PT Raflesia has 'at no time . . . substantiated its claim by producing any land title certificates in respect of any of the lands'.

An Indonesian district court has, however, granted an interim court judgment in favour of PT Raflesia's claim for the return of the land. It awarded the company an injunction last October that bars BLR, BM and BRC from advertising the sale of the plot or transferring ownership to any other party.