KPC again refuses to divest shares until East Kalimantan drops legal suit
Monday, July 22 2002 - 03:41 AM WIB
The East Kalimantan-based producer said that the legal suit which had led to the seizure of its shares by the South Jakarta court should be first withdrawn if the provincial administration wanted the company to begin the divestment process.
"It is something impossible for KPC to offer its shares because the sale of shares which are still seized by the court could be categorized as a crime," said Nunik Maulana, the public relations manager of Rio Tinto, one of KPC?s majority shareholders.
Nunik said that the provincial administration of East Kalimantan should first drop its legal suit against the company if it wanted KPC started the auction of the 51 percent share.
KPC, which operates a large coal mining area in East Kalimantan, is equally owned by world mining giants Rio Tinto and BP. Under its contracts of works, the company?s shareholders are required to divest 51 percent of their shares to local investors. According to the initial schedule, the divestment should be completed by July 31.
However, the mandatory divestment program does not run as expected due to a dispute over the percentage of the shares that must be sold to the central and local government. This has prompted the local authority to fill a legal suit to the Ministry of Energy and Mineral Resources and KPC shareholders for allegedly barring it from buying the entire 51 percent stake.
The East Kalimantan administration agreed early this month to drop the legal suit against the ministry but maintained the suit filed against KPC shareholders. The ministry then urged the provincial administration to drop the legal suit against KPC by July 15 at the latest, or face a counter suit.
Syaiful Teteng, the secretary of the East Kalimantan administration is of the opinion that KPC can go ahead with its divestment plan although its shares are still seized by the court. "Please go ahead with the auction. Why should KPC need to wait for the withdrawal of the legal suit," he said, adding that the provincial administration would drop the legal suit only if there was an indication that the 51 percent would be all sold to the province.
Besides the provincial administration, a number of state and private companies have expressed interest to buy the shares that would be divested by KPC. (*)