Billabong Continues to Face Legal Issues in Indonesia

Submitted by Jim Thesiger on 10 March, 2010 - 06:20

Billabong International (BBG) the company that concentrates in the skate, snow and surf apparel and accessories manufacturing and distributing has come into the spotlight once again after CV Bali Balance (CVBB) dragged the surfwear retailer in a Bali court for around $168 million worth of damages which allegedly was caused from Billabong following the cancellation of a distribution license during the year 2005 by the Gold Coast company. Billabong actively operated in Indonesia during the early 1990s when the company provided Wayan Suwenda- the Balinese surfing legend with the distribution licence. Later he became the public face of the company is Bali. However, things started to get complicated after Wayan Suwenda passed away in 2005 as Ms. Suwenda came up with the claim that she agreed to the action "under duress" immediately after the death of her husband while Billabong claimed that they were moving to buy out all the licensees and distribute themselves, something that the company is currently doing.

The dispute became very much public over the last few years with CVBB taking out huge advertisements in the home media putting its opinion, while on the other hand Billabong publicly continued to respond to the allegations. It is to be mentioned that a number of legal actions has been taken by CVBB against Billabong. One of the employees (Australia-based) of the company has been listed in the wanted list of Interpol while the local marketing manager of the company was taken into custody. These cases involved the issues like the use of photographic material and light box.

It is to be mentioned that the company has applied to a court in Queensland to get the 2005 agreement with CVBB recognised legally which might stop the flow of lawsuit. However, civil action has been filed in the Denpasar District Court in the meantime which is expected to get started in the near future. But these issues are not expected to have any significant impact over the financial performance of the company and the local investors appeared unworried about the legal action with the Billabong share price gaining 2.4 percent on Tuesday, closing at $10.92.