Kideco divestment process faces new uncertainty
Monday, May 26 2003 - 01:20 AM WIB
?We will go on with the law suit,? said governor Suwarna Abdul Fatah on Saturday. He said the lawsuit was unavoidable because Kideco denied East Kalimantan?s rights to buy the company's shares.
East Kalimantan government and Pasir regency administration filed lawsuit against Kideco last month on the ground that the company did not conduct its divestment process in accordance with existing regulations and for failing to offer the shares to East Kalimantan provincial government and Pasir regency, accusations Kideco strongly denied.
East Kalimantan demanded Kideco to pay compensation in excess of US$300 million and insisted that the 10 percent stake Kideco had already sold to two Indonesian companies be annulled.
?Kideco is shocked with the law suit, because, as far as we are concern, we think we have complied with the coal contract of work (CCoW) including offering shares to East Kalimantan government and Pasir regency administration,? said Ali Patan, Kideco?s administration manager.
Meanwhile, a local Balikpapan court had held a session on May 22 on the Kideco case. ?We argued that Balikpapan court had no jurisdiction over Kideco, because the company?s head office is in Jakarta. Any lawsuit should be filed in South Jakarta court or in an arbitration court,? said Frederik J. Pinakunary, Kideco?s lawyer.
Kideco?s coal contract of work obliges it to gradually divest up to 51 percent shares to Indonesian investors. In 2001, the company offered 34 percent shares, but only 10 percent was sold to two companies. Last year it offered another 34 percent and this month, the company is expected to complete the 51 percent divestment by offering another 7 percent.
The East Kalimantan lawsuit had prompted the central government government to delay the divestment process. ?We have decided to delay the offering until after the lawsuit has been lifted or a compromise has been reached,? said Wimpy S. Tjetjep, Director General of Geology and Mineral Resources at the ministry of Mines and Energy on Saturday. He added that the government of South Korea, had sent a letter to the government of Indonesia to inquire the lawsuit. Kideco is a subsidiary of South Korean company Sam Tan Corp.
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 also said that the lawsuit was politically motivated to strengthen the position of Governor Suwarna Abdul Fatah in next month's election. "He is trying to gain popularity to cover for his failure to push East Kalimantan to acquire Kaltim Prima Coal (KPC) stake before his term ends,? said a source. ?He?s trying to build image that he is fighting all out for East Kalimantan?s interest.?
East Kalimantan government, with the back up of businessman David Salim, had been involved in legal battles and lengthy negotiation to acquire a controlling stake at KPC. (godang)