Wed, 29 Aug 2007
From: The Jakarta Post
By Andi Haswidi, The Jakarta Post, Jakarta
Altimo, a subsidiary of Russia's Alfa Group, will not back down on its investment plans for Indonesia despite allegations of a commercially motivated smear campaign levied by a number of civil society groups, a company official said.

"We will never give up on our plan, including the possibility of buying a mobile telecoms operator here," Altimo local chief representative Soeharto told The Jakarta Post on Tuesday.

The company has been making it clear since last December that it wants into the Indonesian telecoms market through a stake in one of the existing players, and is ready to invest up to US$2 billion in total.

Soeharto said that buying a stake in an existing operator would be easier than setting up a new one and starting from scratch.

"Acquiring shares on the stock market would also be difficult as the number of shares on offer are limited so that their price would rocket as soon as the market got wind of what was going on."

However, Altimo's moves have been condemned by various civil society groups, including Indonesia Development Monitoring (IDM) and the Federation of State Enterprise Labor Unions (SP-BUMN).

In the light of Russian President Vladimir Putin's visit to Jakarta on Sept. 6, when he will be accompanied by representatives of the Alfa Group, IDM issued a statement urging President Susilo Bambang Yudhoyono to be cautious, particularly as regards Altimo's alleged offer of a loan to the government to buy back the shares it sold in PT Indosat to Singapore Technologies Telemedia (STT).

STT, which is wholly owned by Temasek Holdings, holds a 75 percent stake in Asia Mobile Holdings, which controls a 41.9 percent stake in Indosat.

Last week, Russian online business news portal Kommersant reported that senior Alfa Group officials were scheduled to accompany Putin on his visit to encourage a buyback by the Indonesian government.

"We believe that Altimo is involved in a conspiracy to force Temasek to sell its stake in Indosat using pressure from the Business Competition Supervisory Commission (KPPU)," IDM spokesperson Muhammad Ramdhoni told a media conference, referring to a KPPU investigation into alleged unfair business practices by Temasek.

Meanwhile, SP-BUMN president Arief Poyuono echoed IDM's allegation, saying that Altimo and the KPPU were conspiring against Temasek.

In response, Altimo vice president for corporate communications Kirill Babaev told the Post that the company denied the accusations, adding that the remarks by the IDM and SP-BUMN were proof that it was in fact Altimo that was the victim of a smear campaign.

Soeharto also said: "Indosat is not the only available option. Besides, STT can sell its stake to whoever it wants. So, there is no reason for us to engage in a so-called conspiracy," Soeharto said.

The KPPU has denied it has been conspiring with Altimo to the detriment of Temasek.

Backed by a study by the University of Indonesia's Institute for Economic and Social Research (LPEM-UI), which has since been contradicted by another study, the KPPU decided in May to launch a probe, which is expected to be completed before Sept. 25.



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