ST Telemedia denies wrongdoing in Indosat investment

Associated Press
25 Jun 07 [22 Jun 07]

Singapore Technologies Telemedia, which is wholly owned by the city-state’s state investment arm, on Friday denied any wrongdoing in its investment in Indonesia’s second-largest cellular company, PT Indonesia Satellite, or Indosat.

“ST Telemedia and its subsidiaries deny any wrongdoing as alleged by Indonesia’s Business Competition Supervisory Commission (KPPU),” ST Telemedia said in a statement.

Indonesia’s competition watchdog has intensified an investigation into claims ST Telemedia’s parent company, Temasek Holdings – a shareholder in Indonesia’s two largest mobile phone operators – was violating anticompetitive laws.

“ST Telemedia and its subsidiaries have complied with Indonesia’s laws and regulations… ST Telemedia is disappointed with the KPPU’s proceedings and trust that they will conclude that there is no merit to the allegations,” it said.

Temasek’s wholly owned ST Telemedia owns 39.96 percent of Indosat. Temasek also owns 56 percent of Singapore Telecommunications, which has a 35 percent stake in Indonesia’s largest cellular operator, unlisted PT Telkomsel.

In 2002, ST Telemedia was invited by the Indonesian government to take part in an auction for a stake in Indosat, ST Telemedia’s statement said.

ST Telemedia submitted the highest price for the stake and won the bid.

“The acquisition was approved by the government of Indonesia, including Indonesia’s People’s Representative Council, and its relevant regulatory authorities,” it said.

Indonesia’s anti-monopoly law, passed in 1999, is targeted at preventing the formation of cartels and restricts a company or a group from owning states in firms in the same industry that compete head-to-head