Graft charges could derail Telkom-Ariawest deal<\/p>\n
Debbie A. Lubis, The Jakarta Post, Jakarta<\/p>\n
Corruption allegations against a top official of PT Ariawest
\nInternational, a former partner of the state-owned
\ntelecommunications company PT Telkom, to develop and operate
\nfixed telephone lines in West Java, could delay an expected deal
\nbetween the two firms in resolving a long-running dispute, a
\nlawyer said.<\/p>\n
\"I strongly believe this investigation suggests a desire to
\nseek publicity for other motives, one of which may possibly be an
\nattempt to frustrate the ongoing settlement negotiations between
\nthe parties,\" Ariawest lawyer Todung Mulya Lubis said on Friday
\nat a media conference.<\/p>\n
Reports earlier said that the Bandung prosecutor's office in
\nWest Java had declared president of Ariawest International John
\nG. Voundras and another official Michael Lee Towne, suspects in a
\nRp 74 billion (US$7.79 million) corruption case.<\/p>\n
The case was filed by Telkom West Java and the Banten branch
\nof the workers' union.<\/p>\n
For over a year, Telkom and Ariawest, which is 35 percent
\nowned by U.S.-based telecommunications firm AT&T, have been
\ntrying to reach a solution over the troubled West Java
\ntelecommunications project.<\/p>\n
The dispute has put pressure on Telkom shares in the stock
\nmarket.<\/p>\n
But earlier this month Telkom said it hoped to strike a deal
\nsoon to buy out the AriaWest West Java assets for around $300
\nmillion as compensation for terminating the Ariawest contract to
\noperate fixed lines in the province.<\/p>\n
\"Actually the agreement may be signed in the fourth week of
\nApril because in principal, some agreements have been concluded
\nby Telkom and AriaWest. But this allegation has become the
\ngreatest hurdle for the settlement,\" Todung said.<\/p>\n
The alleged corruption case centers on the transfer of some Rp
\n74 billion in funds by the two Ariawest senior officials to the
\ncompany's bank account at Chase Manhattan Bank Jakarta branch to
\ncover expatriate and training costs from 1996 to 1999.<\/p>\n
According to the charges, the fund transfer was considered as
\ncorrupt because it was executed without any receipts or other
\nexplanatory notes.<\/p>\n
But Todung said that the allegation was baseless.<\/p>\n
\"The corruption allegation is baseless since there was no
\nevidence. We have the audited financial report and joint
\noperation agreement. All expenses are justified,\" he said.<\/p>\n
Todung also said that the prosecutor's office had generated
\ndefamatory and insulting media reports and had carried out an
\nunfair investigation since his client had not been summoned
\nthrough any proper legal procedure.<\/p>\n
He added that his law firm had sent a letter to the Attorney
\nGeneral's Office to protest the improper action taken by the
\nprosecutor's office.<\/p>\n
\"For the sake of Indonesia's future development and ability to
\nattract much-needed foreign investment, we trust your office will
\nbring this matter under control,\" the letter said, a copy of
\nwhich was seen by this paper.<\/p>\n
He also said that the Telkom board of directors did not
\nsupport the corruption charges made by the company's West Java
\nand Banten workers' union branches.<\/p>\n
Meanwhile, Telkom investor relations manager Setiawan
\nSulistyono said that negotiations with Ariawest were expected to
\nbe completed soon, and hoped that they would not be derailed by
\nthe corruption allegation issue.<\/p>\n
Telkom shares were down to Rp 4,175 on Friday on the Jakarta
\nStock Exchange, from Rp 4,225 on Thursday.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/graft-charges-could-derail-telkom-ariawest-deal-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}