E. Kalimantan says to have partially dropped lawsuit against KPC
Tuesday, July 23 2002 - 02:21 AM WIB
?We have dropped assets seizure lawsuit against KPC on Monday, but still maintaining civil suit. That would be sufficient for KPC to make divestment offer. Now they have no reason whatsoever to delay divestment process,? said Suwarna Abdul Fatah, East Kalimantan Governor over the phone interview.
East Kalimantan provincial administration filed civil lawsuit against KPC on the ground that prolonged delay in KPC divestment process had caused potential loss of over US$ 700 million to the former as potential buyer. The civil suit was then followed by assets seizure lawsuit, which was granted by South Jakarta District Court, which barred KPC from offering its shares to Indonesian government or Indonesian owned business entities as stipulated by coal contract of work (CCoW).
Suwarna said East Kalimantan did not drop civil lawsuit because it had nothing to do with KPC divestment process.
?We would only drop the civil law suit until our demand that we be given right to purchase the entire 51 percent of KPC shares is satisfied,? he said
Rio Tinto spokesperson Nunik Maulana said she had yet received notification about lawsuit withdrawal. Rio Tinto and BP equally own KPC shares.
An industry sources contacted by Petromindo.Com said the lawsuit drop is actually sufficient for KPC to offer its shares, but the government had insisted that East Kalimantan must also drop civil lawsuit. The source said the lingering civil lawsuit would make it difficult for successful buyer(s) to complete transaction.
Under the CCoW, KPC must divest at least 51 percent shares to Government or Indonesian owned business entities after ten years of commercial production. East Kalimantan provincial administration and East Kutai regency administration had been insisting to be given sole right to purchase the entire 51 percent of KPC shares, while KPC insisted that every party interested in purchasing the shares has equal right. East Kalimantan provincial administration is believed to be backed by David Salim, a businessman with close tie to tycoon Sudono Salim.
The latest KPC press release said that it and the government had agreed to offer up to 31 percent shares to East Kalimantan and 20 percent to state coal miner PT. Tambang Batubara Bukit Asam provided all litigations must be withdrawn prior to the offer. But East Kalimantan sticks to its gun that it must be given the whole 51 percent and would not withdraw lawsuits until its demand is satisfied.
Earlier, Ministry of Energy and Mineral Resources had threatened East Kalimantan administration that it would file intervention suit if the latter did not drop lawsuit against KPC by July 31.
Government and KPC shareholders had agreed that the entire shares of KPC valued at US$ 822 million. But if the shares are not offered by July 31 this year, new price must be negotiated.
KPC is Indonesia?s largest coal exporter with annual output of more than 15 million tons. KPC is located in East Kutai regency. (alex/arry/godang)