East Kalimantan won't drop lawsuits until named single buyer

In what seems to be a move to complicate KPC divestment process, East Kalimantan provincial government on Monday insisted that it would not withdraw legal suits against KPC shareholders and central government until being named as the only buyer for 51 percent of KPC shares that are scheduled to be offered.

"There's no way we are going to drop the lawsuits if they don't offer 51 percent of KPC shares only to PT Melati Bhakti Satya which is 100 percent owned by East Kalimantan administration," East kalimantan governor Suwarna Abdul Fatah told reporters in a press conference in Jakarta.

On 18 March 2002 KPC shareholder agreed with the Government of Indonesia to offer 51 percent of KPC shares to Indonesian parties. Under that agreement, the Government of Indonesia and KPC agreed that the offer would proceed as soon as all legal actions related to KPC’s divestment obligations had first been withdrawn.

"That agreement is the trick played by Rio Tinto to split the 51 percent shares to several; parties so that it could still control KPC management," said Syaiful Teteng, a senior East Kalimantan official said.

"Rio Tinto is playing trick to delay KPC divestment to pass the March 31 deadline, since we have only three working days left, " he said.

The offer KPC shares for 2001 will lapse after March 31.

Teteng said that East Kalimantan has every right to be named single buyer since, he said, according to coal contract of work, government must be given first right of refusal whenever divestment process occurred.

" If divestment process is not settled by March 31, we will not guarantee the safety of KPC operations," said Chairul Fuad, Vice speaker of East Kalimantan provincial council.

Meanwhile, in its press statement released Monday, Rio Tinto shareholders, Rio Tinto and BP, said that the offer 51 percent of KPC shares to Indonesian parties by 31st March 2002 has been seriously put at risk by further legal action.

KPC insisted that it would proceed with share offer onlly after lawsuits were dropped.

On 21 March 2002, further legal action was taken by the lawyers of East Kalimantan provincial administration when attachment orders were granted by the District Court of South Jakarta over the shares in KPC.

"The attachment orders will place the shares in KPC under the control of the Court and came without prior notice. As long as the orders are in place, KPC cannot complete its divestment offer and transfer shares to Indonesian parties," said the statement.

"KPC remains willing to make the share offer to Indonesian parties as soon as all the litigation is withdrawn."

Thus far, five companies including PT Melati Bhakti Satya had express interest to acquire 51 percent of KPC. (alex/godang)