Bapepam defends Indosat divestment as `transparent'<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The recent sale of the government's shares in publicly listed
\ntelecommunications company PT Indosat was carried out in a
\ntransparent manner, the Capital Market Supervisory Agency
\n(Bapepam) said.<\/p>\n
"Based on the capital market ruling, the divestment (process)
\nof Indosat is transparent," Bapepam Chairman Herwidayatmo said as
\nquoted by detik.com over the weekend.<\/p>\n
The statement came amid strong protests from top politicians
\nand some Indosat employees over the privatization deal of the
\nstate-owned company. The protesters have even asked the
\ngovernment to annul the transaction.<\/p>\n
Herwidayatmo questioned why the protest was staged after the
\ntransaction had been closed.<\/p>\n
He feared that such protests could send a bad signal to
\nforeign investors, which in turn would negatively affect the
\ndomestic capital market.<\/p>\n
Singapore Technologies Telemedia (STT) won the government's
\n41.9 percent stake in Indosat in the middle of this month by
\npaying Rp 5.6 trillion (about US$634 million). It beat Telekom
\nMalaysia in the final round. The transaction is the government's
\nlargest privatization deal this year, providing the bulk of the
\nRp 6.5 privatization proceeds target crucial to help plug the
\n2002 state budget deficit.<\/p>\n
One of the most criticized parts of the Indosat privatization
\ndeal was the lack of transparency in the process. In the past,
\nthe sale of state assets has often been tainted with corrupt and
\ncollusive practices, benefiting certain powerful people.<\/p>\n
Speaker of the People's Consultative Assembly (MPR) Amien Rais
\nhas been the leading critic of the Indosat privatization deal.
\nThe House of Representatives (DPR) sent a letter late last week
\nto the government, demanding the cancellation of the Indosat
\ntransaction. The letter was signed by House Deputy Speaker AM
\nFatwa, a senior member of Amien's Reform Faction at the House.<\/p>\n
Following Amien's lead, surprisingly, is former president
\nAbdurrahman Wahid, who said on Saturday that a state company as
\nvital as Indosat should not fall into the hands of foreigners.
\nAbdurrahman and Amien have often been in sharp disagreement over
\na range of issues. In fact, the latter had played a major role in
\nthe unseating Abdurrahman from the presidency last year.<\/p>\n
Noted economist Sjahrir also raised doubts over the
\ncredibility of the Indosat transaction, citing a lack of
\ntransparency.<\/p>\n
Sjahrir took issue with the shady background of the special
\npurpose vehicle (SPV) through which STT acquired Indosat's
\nstakes.<\/p>\n
"Why is this based in Mauritius?" he asked and explained that
\nslack regulations on the island state allowed companies to avoid
\ndisclosure. "They won't have to name the people behind the SPV."<\/p>\n
He also questioned why the government had chosen Sunday to
\nconclude the transaction. This uncommon practice unnecessarily
\nadded to suspicions, he said.<\/p>\n
But University of Indonesia economist M. Ikhsan criticized the
\nprotesting legislators, saying the government and House should
\nhave agreed from the onset the mechanism for selling state
\ncompanies.<\/p>\n
"Legislators have actually been part of the sale process from
\nthe beginning, so why did they start protesting at the end of
\nit?" he asked.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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