Syahrial Ali's Blog

JAKARTA, Jun 09, 2008 (Xinhua via COMTEX) — Singapore Technologies Telemedia ( STT) Pte Ltd has announced it would sell a 40.8 percent stake in Indonesia‘s major cellular firm PT Indosat to Qatar Telecom (Qtel), local press said Monday.

STT and Qtel have earlier established a joint subsidiary, Asia Mobile Holdings (AMH), which controls the Indosat stake.

However, the Indonesian Business Competition Supervisory Commission (KPPU) said that the deal could violate a Jakarta district court ruling which required a buyer to acquire no more than 10 percent, reported English-language daily The Jakarta Post.

Under the deal, STT will no longer have any involvement in Indosat, Indonesia’s second-largest telecommunications company.According to STT, “Qtel has agreed to pay the equivalent of 1.8 billion US dollars in cash to acquire AMH’s entire interest in Indosat.”

The move followed a recent Central Jakarta District Court ruling that found Singapore’s major investment firm Temasek and its subsidiaries, including STT, guilty of anti-competitive behavior in Indonesia‘s telecommunications industry.

The ruling upheld a KPPU decision last November stating that Temasek and its units had violated anti-monopoly laws, particularly on cross-ownership.

In addition to owning STT, Temasek also owns a 54.14 percent stake in SingTel, which holds a 35 percent stake in PT Telkomsel, the country’s largest cellular phone operator.

The Central Jakarta court fined Temasek and its units, Telkomsel and Indosat, 15 billion rupiah (1.6 million dollars) and gave Temasek a choice of relinquishing at least 50 percent of its shares in both Telkomsel and Indosat or letting go of all shares in either company within two years after the verdict was issued.

The court added that Temasek could sell up to 10 percent of its shares to an individual buyer, higher than the maximum 5 percent mandated by the KPPU.

Temasek and subsidiaries are currently waiting for a final decision from the Supreme Court on their appeal of the district court ruling.

KPPU member M. Iqbal said the sale, as outlined in the press statement, would violate the court ruling.

“The court ordered that each buyer was allowed to acquire up to a 10 percent stake. Therefore, selling a 40.8 percent stake in Indosat should involve four buyers, not just Qtel,” Iqbal told the newspaper.

However, he said, “the KPPU will not react to the divestment plan, and will let the Supreme Court decide whether it is legal or not.”

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