Indonesia says Temasek breaking competition law

Jakarta (Antara News) - Indonesia's competition authority announced Monday that state-linked Singapore investment firm Temasek Holdings has broken the law relating to its ownership of two Indonesian mobile phone carriers.

Temasek has until the end of the month to respond to the findings of the Commission for the Supervision of Business Competition, or KPPU, said commission chairman Mohamad Iqbal.

The commission handed its findings to Temasek two weeks ago, he was quoted by AFP as saying.

Temasek owns 56 percent of Singapore Telecommunications Ltd, or SingTel, which in turn owns 35 percent of Indonesia's largest cell phone carrier, Telkomsel.

Temasek also owns all of Singapore Technologies Telemedia (STT), which owns 41.9 percent of Indonesia's second-largest telecommunications company, Indosat.

Indonesian competition rules ban a single entity from owning a controlling stake in several companies in the same business if it gives the entity a greater than 50 percent share of the market for a given product.

Companies are also restricted from using a dominant position to prevent consumers from buying a product at competitive prices.

The commission is looking not only at the ownership structure but also at Temasek's conduct to determine whether or not it is following the law in setting prices for the services provided by Telkomsel and Indosat, Iqbal said.

A panel of investigators is planning to decide on sanctions against Temasek next month, he said.

"If, after that, they (Temasek) do not accept the decision, they can take the case to a district court," said Iqbal.

If a district court were to rule against it, Temasek could appeal to Indonesia's Supreme Court, he said.

Temasek lawyer Todung Mulya Lubis said the company had already refuted the allegations and that its position has not changed. He said he was still studying the KPPU's findings, declining to elaborate. (*)
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