Acquisition of Salim asset in question

Acquisition of Salim asset in question

The Jakarta Post, Jakarta

Acquiring assets owned by the country's one-time biggest
conglomerate, the Salim Group, is still proving difficult.

Business group Makindo complained on Thursday that it had yet
to gain full control of a former Salim sugarcane plantation and
processing mill in Lampung more than a year after it bought them
from the Indonesian Bank Restructuring Agency (IBRA).

Makindo president Gunawan Yusuf said at a media conference
that Makindo, through its subsidiary PT Garuda Pancaarta and PT
IndoLampung Perkasa, bought Sugar Group Companies, which control
the sugarcane plantation and sugar mill, from IBRA for Rp 1.161
trillion (US$130 million) in November 2001.

Yet it is still unable to gain control of the sugarcane
plantation because the National Agrarian Agency is denying it a
permit to use the plantation on the grounds that the land was
still a subject of dispute.

Gunawan said that Salim still claimed title to most of the
sugarcane plantation despite the November 2001 deal.

Makindo has thus far only been able to gain control of 3
percent of the 54,000 hectare plot, Gunawan was quoted by
Detik.com as saying.

Gunawan, who was accompanied by his lawyer Hotman Paris
Hutapea, said his company had sent a letter to the agrarian
agency, warning it of legal action by the company should the
agency continue withholding a land-use permit.

The Salim Group, which was founded by Sudono Salim, dominated
the country's business sector for decades during former president
Soeharto's era thanks to his close connection with the palace.

The business group lost its most important protector in the
middle of 1998 when Soeharto stepped down, but it is believed to
still have considerable sway within the country's corrupt
bureaucracy.

Under the Master Settlement and Acquisition Agreement (MSAA)
signed in early 1998, Salim agreed to transfer most of its assets
to IBRA as part of the settlement of its debt to the government
totaling Rp 52.7 trillion.

The assets were transferred to PT Holdiko Perkasa established
especially to collect and sell Salim assets.

Gunawan claimed that the sugarcane plantation belonged to
Sugar Groups, which it bought from Holdiko in November 2001.

"It's like buying a car. It's impossible to buy a car without
the engine," he said.

There is a lot of evidence proving Sugar Group's ownership of
the sugarcane plantation, he said.

One of them is a letter signed by Holdiko director Scott
Coffey on March 2, 2002, stating that the sugarcane plantation
was an integral part of Sugar Group.

The Salim Group, he added, also stated in the MSAA that it had
transferred all its assets to IBRA and it had no more assets,
including land, except for those explicitly stated in the MSAA.
The sugarcane plantation was not among the list of assets stated
in the MSAA as still owned by Salim.

Gunawan regretted that rather than putting his weight behind
Makindo, IBRA chairman Syafruddin Temenggung sought to persuade
Makindo to negotiate with Salim to settle the matter.

"It is really regrettable that in a country that claims to
respect the law, there is a man like him (Syafruddin)," he said.