Dispute with bank: Polaris CMD and staff detained by police in Jakarta

In a rude shock to the Indian software industry, Arun Jain, Chairman and Managing Director of Polaris Software Labs, has been reportedly det...

In a rude shock to the Indian software industry, Arun Jain, Chairman and Managing Director of Polaris Software Labs, has been reportedly detained in Indonesia on a complaint by a Jakarta bank.

A statement from the Chennai-based tech firm today said Jain had gone to the Indonesian capital to sort out some issues with the bank Artha Graha, for which it was implementing a project worth Rs 4.8 crore.

Jain has been detained since December 13 along with another Polaris executive Rajiv Malhotra, the statement said. On their arrival at the office of the bank they were detained against their will and were not allowed to leave the premises.

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The bank then filed a report with the local police station at Jakarta acting on which the Indonesian Police detained them, said the company.

‘‘We are in touch with Jain. The detention continues and the company is making vigorous attempts to secure their release through the Ministry of External Affairs, Ministry of Information Technology, NASSCOM and the Indian embassy in Jakarta. The contract with the bank provides for arbitration in Singapore and they have been held despite the clause,’’ a company spokesperson said.

‘‘It is shocking that a chief executive of a leading Indian software firm is detained. Disagreements in software implementations are common and are sorted out in a civilised manner.

The incident bring out the risks involved in doing business in a country like Indonesia. One can only imagine the plight of executives of small firms if they are detained for no reason,’’ said a top official of a multinational software firm.

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Polaris Software had signed agreements with Bank Artha Graha in June 2002 and August 2002 covering central processing, disaster recovery and branch server related work.

The contract was supposed to be completed by July 2003. Artha Graha had served notice of termination on Polaris Software on November 27, 2002.

Polaris responded on December 3, 2002, stating that the grounds for termination were incorrect and offered to resolve the issue through discussion.