Government to settle Cemex dispute in 42 days<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
The new government aims to settle an investment dispute with
\nMexico-based cement producer Cemex SA in 42 days, in a bid to
\nhelp maintain investors' confidence in the economy, according to
\na minister.<\/p>\n
State Minister of State Enterprises Sugiharto said that
\nresolving the protracted dispute straightaway was crucial, to
\nshow to the outside world that the new government is determined
\nto uphold legal certainty and the sanctity of contract.<\/p>\n
"We plan to come up with a settlement to the dispute in 42
\ndays since the setting up of a negotiation team for the problem
\nlast week," said Sugiharto on Monday.<\/p>\n
Sugiharto refused to disclose what settlement options would be
\nproposed to Cemex. But, according to sources at his office, it
\nwould include an option for the government to buy back Cemex's
\nownership in state-owned cement firm PT Semen Gresik, spinning
\noff the company's units before allowing Cemex to control Gresik,
\nand an option to allow Cemex to set up new cement factories if it
\nagrees to sell back its shares in Gresik to the government.<\/p>\n
Cemex has launched a law suit against the government for
\nfailing to execute a 1998 investment deal, under which the
\ncompany was entitled to eventually become a majority shareholder
\nin Semen Gresik after acquiring a stake of more than 25 percent
\nin the East Java-based company six years ago.<\/p>\n
To avoid a costly legal battle, the government has since
\nproposed several options to settle the dispute out of court. The
\nprevious government failed to reach an out-of-court settlement
\nwith Cemex.<\/p>\n
Sugiharto also stressed that all information about the
\nsettlement of the Cemex case should be derived from him as the
\nauthorized official for managing state enterprises, and to avoid
\nconfusion in the public over different statements made by other
\nofficials.<\/p>\n
"I have asked Coordinating Minister for the Economy Aburizal
\nBakrie to coordinate the economic ministers and to read 'the same
\npage' over the settlement of the dispute to avoid dissension in
\nthe future," he said.<\/p>\n
As previously reported, Aburizal told the press that the
\ngovernment was considering allowing Cemex to increase ownership
\nin Semen Gresik to up to 51 percent, a statement quickly
\nchallenged by Sugiharto, who said that the government should
\navoid foreign control of the country's crucial cement sector.
\nSemen Gresik is Indonesia's largest cement maker.<\/p>\n
He warned that if the government lost control of Semen Gresik
\nto foreigners, future cement prices could easily escalate as the
\ngovernment could no longer use the company to balance pressure
\nfor price increases launched by other cement firms already
\ncontrolled by foreigners.<\/p>\n
The government currently controls a 51.01 percent stake in the
\npublicly listed Gresik. The investing public holds a 23.46
\npercent stake.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-to-settle-cemex-dispute-in-42-days-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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