E. Kutai calls for drop of legal suit against KPC shareholders

East Kutai regent Awang Faroek reiterated his call on the East Kalimantan provincial administration to drop its legal suit against shareholders of coal mining giant PT Kaltim Prima Coal (KPC) so as to smoothen the divestment of 51percent of company shares to Indonesian investors, local daily Kaltim Post reported on Monday.

?I am optimistic the shares will be ready for divestment by end-June. But this can happen only if the provincial administration has dropped its legal suit against KPC?s shareholders,? Awang said.

Awang added: ?We should not create dichotomy between the needs of the regency administration, the provincial administration and the central government.?

The government and KPC shareholders had set end-June as the deadline to divest 51 percent of the company shares to Indonesian investors. However, the East Kalimantan provincial administration still insists that it become the preferred bidder for the shares, which is opposed by the government and KPC shareholders Rio Tinto and BP Plc.

The South Jakarta district court still holds Rio Tinto and BP Plc?s assets in KPC as a result of the East Kalimantan administration suing them last year for US$776 million. East Kalimantan accused the shareholders of delaying the divestment of KPC shares.

Awang said over the weekend East Kalimantan and East Kutai officials will attend a meeting in Jakarta on Tuesday to discuss with central government officials preparations for KPC share divestment.

The government recently decided that KPC shares will be sold to state enterprises, Indonesian investors and East Kalimantan. But it has yet to decide share portions to be sold to each of the buyer groups.

KPC operates a huge coalmine in Sangatta in East Kutai, East Kalimantan. (*)