Kideco pushes divestment plan despite legal dispute

Coalminer PT Kideco Jaya Agung will press ahead with its divestment plan despite ongoing legal dispute with the East Kalimantan provincial administration, an official told Petromindo.Com Thursday.

Next week, the company will offer seven percent shares in addition to the 44 percent it had offered in 2001 and last year, said Mahyudin Lubis, director of mineral resources and coal at the Ministry of Energy and Mineral Resources.

Kideco, a subsidiary of South Korean company Sam Tan Corp, operates coalmines in East Kalimantan. Its contract with the government obliges the firm to gradually divest up to 51 percent of its shares to Indonesian companies.

In 2001, Kideco offered 34 percent shares, but only 10 percent was sold. Again, it offered 34 percent of shares last year, but it was not taken up.

East Kalimantan provincial administration had demanded the government to annul the divestment of the 10-percent stake arguing that the province must be given priority to acquire the shares. Moreover, the province demanded Kideco to pay US$300 million in compensation for not offering the shares to the local government.

Early last month, the Balikpapan district court in East Kalimantan turned down the provincial administration?s lawsuit against Kideco on the ground that Kideco was domiciled in Jakarta and that the Balikpapan district court had no jurisdiction to try its legal dispute with Kideco.

Recently, Pasir regency administration in East Kalimantan also filed a lawsuit against Kideco for not offering its shares to the regency. (godang)