JAKARTA: Indonesia's anti-monopoly commission said Temasek
Holdings has violated the country's anti-monopoly laws through its
ownership in two large mobile telecommunication operators.
Ending three months of investigations, the commission gave the
Singapore investment company a fortnight to submit its
defence.
A 109-page document on Singapore's Temasek Holdings is one of the
most detailed investigation reports produced by Indonesia's
Anti-Monopoly Commission (KPPU).
After a probe that lasted for the maximum 120 days allowed, a KPPU
team concluded that the Singapore investment company has violated
Indonesia's anti-monopoly law.
Temasek Holdings was found to have done so through its
subsidiaries' shareholdings in two of Indonesia's largest mobile
telecommunication operators.
Temasek's subsidiaries own a 42 percent stake in Indosat and a 35
percent stake in Telkomsel.
Mohammad Iqbal, Head of Indonesian Commission for the Supervision
of Business Competition, said: "There's evidence to prove that the
process of cross-ownership took place after the divestment of
Indosat to Temasek Group. This created unhealthy
competition."
Indosat and Telekomsel dominate Indonesia's mobile telecom sector,
where eight other players compete in one of the region's most
lucrative markets worth US$5 billion.
Temasek Holdings has denied the charges of cross-ownership,
maintaining that its subsidiaries have their own board of directors
who make their own operational decisions.
It has also denied any involvement in price fixing for mobile phone
charges, pointing out that Telkomsel's majority shareholder is the
Indonesian government.
Temasek's legal counsel reiterated that all claims against the
company are baseless and without merit.
He said Temasek intends to vigorously defend its legal rights at
all opportunities and in all available legal forums.
KPPU's findings have been submitted to a five-member independent
council that will deliver a judgement.
"The council has given the findings of the extended investigation
to the party concerned so that it can inspect the documents, give
its views and enter its defence," said Mohammad Iqbal.
The council threw out a number of cases in the past after the
companies involved entered their defence.
But should it rule against Temasek, it can impose a fine on the
Singapore firm, instruct it to end unfair practices, and pay
restitution for any losses caused. If that happens, Temasek can
still appeal to the Indonesian courts.
The council is expected to deliver its verdict next month in a case
that many experts said lacks clear-cut evidence.
International investors are watching the case closely, and a guilty
verdict, the experts said, would shake investors' confidence and
raise doubts about Jakarta's commitment to protecting foreign
investments even as the country tries to woo more new ones to fuel
the economy.
- CNA/so
