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#47083 - 09 Mar 07 03:10 GOI/Indosat Sale Legal, Rules Supreme Court
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Pujangga Besar

Registered: 24 Apr 08
Posts: 7508
Loc: Jakarta
From Government of Indonesia

Indosat Sale Legal, Rules Supreme Court

The Supreme Court has thrown out a lawsuit against the government over the privatization of telecommunications company PT Indosat, in which a subsidiary of Singapore's Temasek Holdings has a substantial stake, The Straits Times reported on Thursday (1/3/07).

The suit was first filed more than three years ago by a group against the Indonesian government, Temasek subsidiary ST Telemedia, and Indonesia Communication Ltd, a Mauritius-based company. The plaintiffs argued that the December 2002 privatization of the state-owned company, which they said was a strategic state asset, violated the Constitution.

But the court has ruled that the sale was legal. And it said that not only did the plaintiffs fail to prove that the privatization was against the public interest, they also did not prove that they were acting for the majority of the Indonesian public, whom they claimed were against the transaction.

The Supreme Court ruled on the suit late last year but released its judgment only recently.

Supreme Court Judge Djoko Sarwoko told the Times that the panel of three judges ruled that Indosat's privatization was carried out according to the law.

Temasek bought 41.9% of the shares in Indosat, the country's second largest telecommunication operator, as part of a wider privatization program under the Megawati Sukarnoputri administration. The Indonesian government retained 14.5% of Indosat shares while the rest were held by private investors, mainly Indonesians.

Sarwoko said that although Temasek has a substantial stake, Indosat could not be said to be fully under “foreign control”. He added that, in accordance with the law, foreign ownership in Indosat “does not exceed 85%”.

He also said that nullifying the deal would damage Indonesia's reputation as a country that welcomes foreign investment. “The international community's confidence in the security of foreign investment here would be undermined and this would affect the Indonesian public interest,” he said.
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#47086 - 09 Mar 07 03:42 Re: GOI/Indosat Sale Legal, Rules Supreme Court [Re: KuKuKaChu]
doremi Offline

Registered: 17 Jan 07
Posts: 488
Loc: slouch couch
Interesting outcome; it remains to be seen whether foreign investors (FDI) will come pouring into Indonesia?


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