Freeport urged to immediately pay dividend to the government
Wednesday, July 7 2004 - 03:43 AM WIB
The government has again urged Freeport Indonesia to quickly pay dividends for 2002 and 2003 and warned that the dividend payment should not be linked to the company's merger proposal, Koran Tempo reported on Wednesday.
"Freeport must pay the dividend even if its merger proposal is turned down by the government," the deputy of the state minister for state enterprise, Roes Aryawijaya said in Jakarta on Tuesday.
Freeport has delayed the payment of the dividend for 2002 and 2003 book years waiting for the completion of the processed merger of Indocopper into Freeport McMorran, the majority shareholder of Freeport Indonesia.
Roes said that the office of the state minister for state-owned enterprises which represents the government's interest in Freeport Indonesia had approved the merger proposal but the final decision on the merger plan would be made by the ministry of energy and mineral resources.
"So, even if the merger proposal is turned down, it has no reason for Freeport to delay the payment of the dividend," he added.
The government has a 9.4 percent interest while Freeport McMorran and Indocopper owns 81.3 percent and 9.3 percent, respectively.
Freeport McMorran which controls almost 100 percent interest in Indocopper was waiting for the government's approval to merge Indocopper into the U.S.-based company as part of its consolidation measure. With this merger, Freeport McMorran would enable to directly control 90.7 percent ownership in Freeport.
Director General of Geology and Mineral Resources Simon Felix Sembiring said in Jakarta last week that the ministry of energy and mineral resources might turn the merger proposal because the vertical merger would hurt the national interest.
The ministry's legal team, according to Simon, viewed that the merger of Indocopper was against the mission of the company which was established years ago to represent national companies in Freeport Indonesia.
Indocopper was initially 51 percent owned by Bakrie Group and 49 percent by Freeport McMorran. In 1997, Bakrie sold its ownership to Nusamba Group, which is owned by former president Soeharto's close friend Bob Hasan. The latter sold its interest to McMorran, making it as the sole owner of the company. (*)