Govt won't immediately resume Kideco divestment

The central government will not immediately resume the stalled share divestment process of East Kalimantan coal miner PT. Kideco Jaya Agung despite recent local court decision, which cleared the company from lawsuit filed by East Kalimantan provincial administration.

?We will have to wait whether East Kalimantan provincial administration will appeal to higher court, or file new lawsuit to South Jakarta district court before deciding to resume divestment program. Ideally, Kideco must be cleared from legal problems before resuming divestment,? said a government official who declined to be named on Saturday.

East Kalimantan, together with Pasir regency administration, had complained to the Balikpapan court that Kideco had failed to offer its shares to the province. The province demanded Kideco to pay compensation in excess of US$300 million, and insisted that the Balikpapan court annul a previous divestment transaction. Kideco sold a 10-percent stake in 2001 to Indonesian investors.

The province?s lawsuit prompted the central government to halt the process of selling the remaining 41 percent shares of Kideco.

In keeping with its contractual obligations, Kideco is in the process of divesting 51 percent of its shares.

The court early this week rejected the lawsuit saying it had no jurisdiction to try the case because Kideco is domiciled in south Jakarta, and therefore, such case must be tried by South Jakarta court.

East Kalimantan was given two weeks to appeal.

Meanwhile, Kideco?s senior official said it was aiming to resume divestment process immediately after the lawsuit was rejected. ?But that all will depend on government?s decision,? said Ali Patan, Kideco?s administration manager.(godang)