Statement of PT Matahari Department Store Tbk regarding the Lawsuit from Pasaraya

17 January 2018 - PT Matahari Department Store Tbk (“Matahari” or “The Company”; stock code: “LPPF”) declares that the statement from Pasaraya in several mass media regarding the breach of contract by Matahari is not true.

“We have done all of our obligations as a tenant as stated in the agreement, and regarding the accusation about the arrears of service charge is not true, and in fact, Pasaraya still retain our security deposit with a nominal which is more than enough to pay the lease fee and service charge. Before the lawsuit from Pasaraya, Matahari has filed a lawsuit against Pasaraya regarding the breach of contract and their negligence in fulfilling the condition and commitment of Pasaraya which has been agreed by both parties in the lease agreement,” said Miranti Hadisusilo, Corporate Secretary & Legal Director of Matahari.

Matahari has run its business for 60 years professionally, commercially, and with the spirit of mutual benefit. The Management always do a thorough analysis for the performance of the 155 stores in 73 cities across Indonesia. Matahari’s performance at Pasaraya Blok M and Pasaraya Manggarai for 2 years since the opening in June 2015 is far below the expectation, and experiencing loss for hundred billions and this is due to the breach of contract by Pasaraya’s management by not fulfilling their initial commitment agreed by both parties, which is to change and create Pasaraya into a mall concept with supportive infrastructures in 2 years as stated and agreed upon.

Without any goodwill from Pasaraya’s management to make the changes, Matahari has no other choice and decided to close the two stores of Matahari and filed a lawsuit for compensation against Pasaraya in September 2017 regarding the breach of contract by Pasaraya and their negligence in fulfilling the condition and commitment as agreed by both parties in the lease agreement.