Legal suit against Minister of Energy rejected by court
Saturday, November 6 2004 - 03:09 AM WIB
The ministry's legal advisor Ruston Situmorang said that the court could not proceed with the legal suit because it had no rights and judiciary to handle the suit, which was also filed against the regent of Kutai and former and current shareholders of coal miner PT Kaltim Prima Coal (KPC).
Two companies owned by the East Kalimantan provincial administration, Melati Bhakti Satya (MBS) and Pertambangan dan Energi Kutai Timur (KEPI) filed the suit against the minister at the State Administration Court in November, last year after the minister approve the sale of KPC's 18.8 percent stake to the East Kutai Regency administration.
The two companies said that the approval given to the regency to buy KPC's shares had hampered the entire process of KPC's divestment plan.
Rio Tinto and BP were required to divest up to 51 percent of its stake in KPC two years ago as part of the mandatory divestment requirement stated in the company's contract of work. As part of the deal, the government had allocated 31 percent stake to East Kalimantan provincial administration and East Kutai regency administration, and another 20 percent to state owned coal producer PT Tambang Batubara Bukit Asam.
The divestment however could not be carried out as expected because the East Kalimantan provincial administration insisted to buy all of the 51 percent shares, which are worth US$419 million. Besides this problem, the price demanded by Rio Tinto and BP had caused a long delay in the divestment.
Surprisingly, when the negotiations to break the deadlock were still going on, Rio Tinto and BP secretly sold their entire stake in the coal producer to Bumi Resources in late 2003.
While the East Kalimantan provincial administration was strongly opposing the take over move, East Kutai government made a separate deal with Bumi Resources and agreed to buy 18.6 percent of KPC shares from the latter for about US$152.89 million. (*)