Kideco wins in E. Kalimantan court

An East Kalimantan court on Tuesday handed down a verdict against Pasir regency administration that had demanded coal producer PT Kideco Jaya Agung to compensate it for not selling its shares to the regency, according to a Kideco official.

Tanah Grogot disrict court judges decided that the central government had no any objection to Kideco?s decision to sell its shares to any Indonesian parties, Kideco?s administration manager Ali Patan told Petromindo.Com Tuesday.

?The judges said that Pasir is part of the Indonesian government. It decided therefore that the regency must follow the central government?s policy," Ali said.

Pasir had earlier joined East Kalimantan provincial administration to sue Kideco in the Balikpapan district court on the ground that the company had not offered its shares to the province. The demanded the company to pay them compensation in excess of US$300 million.

The Balikpapan court judges however turned down their suit and asked them to report their case to the South Jakarta district court because Kideco was domiciled in the area.

Koren firms Samtan Corp and Samchully Corp jointly own Kideco which ha have coal mining operations in Pasir.

In keeping with its contractual obligations, Kideco in 2001 offered 34 percent of its shares to Indonesian firms, but only 10 percent was sold. Last year, the company offered another 34 percent of its shares, and in May it was supposed to complete the mandatory divestment of 51 percent if its shares. (godang)