TEMASEK LOSES LEGAL BATTLE IN RI'S SUPREME COURT

By Andi Abdussalam

     Jakarta, Sept 12 (ANTARA) - After a legal battle for about five months, Singapore's state-owned investment firm Temasek Holdings Pte Ltd has to accept an unfavorable decision by the Indonesian Supreme Court (MA).
     The highest law enforcing body rejected Temasek's legal review suit against a ruling by Indonesia's Business Competition Commission (KPPU) that the Singapore company had violated the country's monopoly and business competition law.
     "(The judges) in their verdict rejected (the appeal) with improvements," Chief of Public Relations and Legal Bureau Affairs of the Supreme Court (MA), Nurhadi said on Friday.
     The ruling was decided by a panel of supreme judges chaired by Chief Justice Bagir Manan with members justice Harifin A Tumpa and Doko Sarwoko on September 10, 2008.
     He said that the decision was final and binding so that other legal avenues were no longer possible.
     "With the (MA) decision, the Central Jakarta district court ruling on Temasek will remain effective except point 6 of the verdict which has been revoked," he said.
     Point 6 of the Central Jakarta district court's verdict mentioned conditions on the relinquishing of stake ownership of Temasek, where buyers are each limited to purchase 6 percent only of the stake to be let go and the buyers might not be associated with Temasek.
     "The judges abolished only point 6 of the verdict, other rulings in the Central Jakarta district court verdict still remain," he said.
     The Central Jakarta District Court found last May that Temasek had violated Article 27 a of Law No. 5 /1999 on Monopolistic and Unsound Business Competition Practices.
     "Temasek Holdings and its subsidiaries violated Article 27 point (1), Law No. 5 / 1999," Presiding Judge Andriani Nurdin said at that time.
     The KPPU in November last year found that Temasek Holdings had violated Article 27 a of Law No. 5 /1999 and Monopolistic and Unsound Business Competition Practices.
     However, Temasek challenged the Central Jakarta district's verdict after its appeal was rejected. It filed the appeal with the Central Jakarta district court over a ruling in November last year of the KPPU that it and its subsidiaries had violated Indonesia's anti-monopoly law, particularly the law's articles on cross-ownership.
     The Central Jakarta District Court found that Temasek had violated Article 27 of Law No. 5 /1999 on Monopolistic and Unsound Business Competition Practices.
     "Temasek Holdings violated Article 27 point (1), Law No. 5 / 1999," Presiding Judge Andriani Nurdin said.
      The court ordered the Singaporean investment firm to sell or reduce its stakes in the two Indonesian mobile-phone-service providers, Telkomsel and Indosat.
     The court also fined Temasek, Telkomsel, Indosat and each of its subsidiaries Rp15 billion (US$1.6 million) 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 a year.
     The KPPU in November last year found Temasek Holdings guilty of cross-ownership in the two domestic mobile telecommunication companies leading it to abuse its dominant position in the market and to practice monopoly.
     The business competition law bars a company from having a controlling stake in another company in the same business sector with a market share of 50 percent or more.
     The KPPU said last year Temasek had to let go all indirect shares either in PT Telkomsel or in PT Indosat, and to pay a fine of Rp25 billion for breaching the anti-monopoly law.
     At that time Temasek owned a 54.15 percent stake in SingTel Group which held a 35 percent stake in Telkomsel, while Singapore Technologies Telemedia (STT) which was wholly owned by Temasek controlled 75 percent of Asia Mobile Holdings which in turn had a 41.9 stake in Indosat.
     The largest market shareholder in Telkomsel was found guilty of violating article 17 of the law, particularly of abusing its dominant power to determine the interconnection tariffs among operators.
     Temasek's subsidiary SingTel said it was disappointed by the Central Jakarta district court's verdict to reject Temasek's appeal.
     "SingTel is deeply disappointed with the Central Jakarta District Court's ruling to uphold the KPPU decision. The court's ruling is without any basis and we object strongly to it. SingTel and SingTel Mobile do not own majority shares in any Indonesian company. Further, neither SingTel Mobile nor SingTel controls Telkomsel. Telkomsel is majority-owned and controlled by PT Telkom," SingTel was quoted last May as saying in a statement.
      According to KPPU chairman Syamsul Maarif, consumers had suffered a loss of between Rp14 trillion and Rp31 trillion over the past three years due to the high cellular phone tariffs determined by the two cellular phone service providers.
     "The cellular phone tariff is 40 percent higher than that in neighboring countries," Maarif told a private TV station 'MetroTV' recently.  (T.A014/A/hajm/A014/A/A014) 12-09-2008 20:12:17