Friday May 9, 07:05 PM
Temasek loses mobile stakes appeal
By John Aglionand Taufan Hidayat in Jakarta
An Indonesian court dismissed an appeal by Temasek against a ruling that the Singaporean state-owned investment company dominated the local mobile phone market through indirect ownership of stakes in Indonesia's two biggest operators. The
court ordered Temasek to sell all its shares in one of the operators or halve its holding in both within 12 months. Temasek and its subsidiaries Singapore Telecommunications (Z78.SI - news) and Singapore Technologies Telemedia were each fined Rp15bn ($1.6m).Foreign investors are watching the case closely as a barometer of whether there has been any improvement in either Indonesia's investment climate or its notoriously uncertain legal system. Temasek owns 55 per cent of SingTel, which in turn owns 35 per cent of Telkomsel, Indonesia's largest mobile phone company. Temasek also wholly owns ST Telemedia, which owns 75 per cent of Asia Mobile Holdings, which in turn owns 41 per cent of Indosat, the number two operator. The judges ruled that Temasek, through these shareholdings, was able to control the management of both Telkomsel and Indosat and so to unfairly dominate the market. AMM, of which Qatar Telecom (Berlin: QJX1.BE - news) owns the other 25 per cent, Telkomsel and the Indonesian affiliates of SingTel and ST Telemedia were also each fined Rp15bn. All the fines were reduced from the Rp25bn penalties the Business Competition Supervisory Agency (KPPU) imposed in its initial ruling on the case last November (Frankfurt: A0S9N7 - news) . Temasek, ST Telemedia and SingTel expressed "deep disappointment" at the verdict. The former two said that they would appeal to Indonesia's supreme court while SingTel said it would first study the judgment. Goh Yong Siang, Temasek's managing director for strategic relations, insisted the holding company plays no role in either Telkomsel or Indosat's business decisions and operations. "Both Telkomsel and Indosat are regulated businesses, operating within the guidelines of the Indonesian Telecommunications Regulatory Authority," he said. Lee Teng Kiat, chief executive of ST Telemedia, said the verdict was based on "groundless allegations" by the KPPU. www.ft.com/financial
Click here for more from FT.com
|
Send Article by Email
