though i'm not a great fan of temasek, i think one should listen
to all views and not be blinded by one's prejudice. the indon
themselves are criticising ruling:
Jakartas case Legal violations
Ruling against Temasek not only controversial, but based on two
legal violations that could be criminal, says legal aid director.
Jakarta Post.
Nov 23, 2007
By Habiburokhman
Director of the Legal Aid Body for State Owned Enterprises.
The Business Competition Supervisory Commission (KPPU) on Monday
found Temasek Holdings Pte Ltd guilty of breaching the
anti-monopoly law in Indonesia's telecommunications industry.
The cellular telecommunications industry is fairly strategic for
Indonesia's development now and in the future, so it is no wonder
controversies have shrouded the case right from the start.
It is to be expected therefore the Temasek case will remain highly
controversial until the appeal process ends up in the Supreme
Court.
Among the controversy a very important suspicion has arisen: there
may have been at least two legal violations in the case by the
KPPU.
These violations not only have criminal consequences, but could
also completely cancel KPPU's case against Temasek.
The violations include the use of false information related to the
results of a telecommunications survey conducted by the LPEM-UI
socio-economic research unit of the University of Indonesia, and
suspicions surrounding the back-dating of KPPU's further
investigations report and the formation of KPPU's panel of judges
for the Temasek case.
First, there is suspicion false results were used in LPEM-UI
study.
On Sept 12, 2007, the National Commission Watch (KNW) reported KPPU
chief M. Iqbal and another KPPU member, Nawir Messi, to the Jakarta
Police for alleged use of false and highly questionable
documents.
In the KPPU document titled "Suspicion of Violation of Law No
5/1999 by the Temasek Business Group", signed by Nawir Messi, KPPU
quoted outcomes (several times) from LPEM-UI research titled "A
study of consumer losses resulting from unhealthy competition in
the Cellular Telephone Industry in Indonesia in 2007".
It must be pointed out the LPEM-UI report was only done on May 7,
and signed by the LPEM-UI Chairman M. Chatib Basri on the same
date.
This research was commissioned by PT APCO Indonesia, a public
relations company hired by the Indonesian unit of Russia's Altimo
Business Group.
This means the KPPU had already decided to use the LPEM-UI report
before carrying out its own investigations.
While the LPEM-UI research documents were published May 7, the KPPU
had released its document, referencing the UI report, on April 26.
How could this be?
KPPU can thus be suspected of using false documents and false
information in investigating the Temasek case.
The use of false documents is a serious crime, which is regulated
by the criminal code, and would automatically nullify all the
KPPU's findings and investigations.
Second, there is the issue of back-dating the findings of the KPPU
investigation team and the formation of a panel of judges.
On Oct 7, a member of KPPU's Investigation Team, Benny Pasaribu,
revealed the date of the KPPU findings and the formation of the
KPPU panel of judges had been backdated.
This meant the dates in documents used by KPPU were incorrect and
the formation of the panel of judges was not legally proper.
Whatever the motives, back-dating cannot be accepted legally.
Back-dating means a change was made to the date of the report made
by the investigation team and the formation of the panel of
judges.
In addition, the back-dating can also be categorised as a criminal
act with regards to falsifying documents as laid out in the
criminal code Para 263.
One conclusion can be drawn from KPPU member Benny Pasaribu's
disclosure: KPPU could not prove Temasek carried out monopolistic
practices.
This conclusion also makes the Temasek case null and void.
There is a high possibility Temasek would take the case to the
international arbitration tribunal.
The two legal violations mentioned earlier would add to Temasek's
ammunition.
Other ammunition, which it already possesses is the fact the
divestment of 41.94 percent of Indosat (in December, 2002) to
Temasek subsidiaries took place at a time when another Temasek
subsidiary, SingTel, already owned 35 percent of Telkomsel.
This fact shows that even though Temasek already owned 35 percent
of Telkomsel, the Indonesian government and KPPU still invited and
allowed Temasek's ST Telemedia to bid for the Indosat stake through
an international competitive bid.
So if SingTel's ownership (35 percent) in Telkomsel and ST
Telemedia's holding (41.94 percent) in Indosat was considered a
monopoly, thus violating the anti-monopoly law, why did the
Indonesian government invite ST Telemedia to tender for Indosat in
the first place?
In the final bidding process, the government notified ST Telemedia
that Indosat shares were free and clear (having no legal
problems).
The government had also notified a joint commission of the House of
Representatives that state-owned Telkom controlled the majority of
the shares of Telkomsel.
This clearly shows the status of Temasek's indirect ownership of
Indosat and Telkomsel was cleared in late 2002 and was not
considered majority control of both mobile operators until
recently.
During the final process of Indosat's divestment, the Indonesian
government publicly explained that SingTel and ST Telemedia
management teams operate autonomously and independently of Temasek
management and are free to compete against each other in the
cellular market.
So why did KPPU insist on investigating Temasek after four
years.
If this is the way we treat foreign investors who came here at the
government's invitation at a time when our economy was in a very
difficult period, it is unlikely any more major foreign direct
investors with a long-term perspective would enter.
Our economy would then attract only short-term, hot foreign
money.
http://www.thejakartapost.com/detaileditorial.asp?fileid=20071121.E02&irec=1
