East Kalimantan files lawsuit against Kideco
Thursday, April 24 2003 - 01:11 AM WIB
Industry sources contacted by Petromindo.Com acknowledged that the lawsuit was filed in Samarinda court two weeks ago and the court had already issued an order to seize Kideco?s Balikpapan office.
None of Kideco?s official was available for comment. Mahyudin Lubis, director of mining enterprises at directorate general of geology and mineral resources said he had not yet received information regarding the lawsuit.
Kideco?s contract of work obliges it to gradually divest up to 51 percent of shares to Indonesian owned entities after 10 years of commercial production. In 2001, the company was obliged to offer 37 percent shares for sale, but only managed to sell 10 percent to two local companies. The sale was closed in March 2003. In 2002, the company was obliged to offer 34 percent of its shares and is now in the offering process.
The sources said the claim made by the East Kalimantan government that it had never been offered a chance to buy Kideco?s shares was baseless as Kideco had made the offer both to the provincial administration and the government of Pasir regency, where the company is located. But until the deadline was passed, both administrations did not respond.
The sources said the lawsuit could jeopardize Kideco?s divestment process, as it would make interested investors to shy away.
Last year, the East Kalimantan provincial administration had also filed a lawsuit against Kaltim Prima Coal over its divestment process. The lawsuit was retracted after the central government allocated 31 percent of KPC?s shares for sale to East Kalimantan provincial government and east Kutai regency administration.
Sources said the ministry of energy end mineral resources is now working hard to make East Kalimantan withdraw its lawsuit against Kideco.
Kideco is a subsidiary of South Korean firm Sam Tan Limited. the company is one of Indonesia's top coal producer.(godang)