Bakrie denies any wrongdoing in Freeport deal

Bakrie denies any wrongdoing in Freeport deal

JAKARTA (JP): Chairman of PT Bakrie & Brothers Aburizal Bakrie
denied on Thursday that he had acquired a lucrative stake in
copper and gold mining company PT Freeport Indonesia through his
political connections.

Aburizal said Bakrie's affiliate Indocopper Investment
Corporation (IIC) acquired a 10 percent stake in Freeport
Indonesia, a subsidiary of the U.S.-based Freeport McMoRan Gold
and Copper Inc., "in line with existing procedures" in 1991.

He said IIC bought the shares, which were offered to the
Indonesian people by Freeport McMoRan, in compliance with the
terms of its renewed contract of works (COW) and after finding
that neither the government nor state and private companies were
interested in buying the shares.

"When PT Freeport Indonesia offered the shares, neither
private national companies nor the government were interested (in
buying them)," Aburizal said.

Aburizal was countering allegations made by Jeffrey A.
Winters, an American professor who earlier this week said that
Coordinating Minister for Economy, Finance and Industry Ginandjar
Kartasasmita had colluded with Aburizal to help the latter
acquire a stake in Freeport while he served as minister of mines
and energy from 1988 to 1993.

Freeport Indonesia, which mines the world's largest gold and
cooper reserves in Irian Jaya, was 90 percent owned by Freeport
McMoRan and 10 percent owned by the Indonesian government until
the government renewed its contract in December 1991.

The government then made McMoRan divest another 10 percent of
its shares to the Indonesian people in exchange for renewal of
the contract.

The Sept. 30 edition of the Asian Wall Street Journal reported
that Bakrie had possibly acquired a stake in Freeport thanks to
his connection with Ginandjar.

The newspaper said Bakrie paid $212.5 million for a 10 percent
stake in Freeport Indonesia. The purchase was financed by a $173
million bank loan guaranteed by Freeport McMoRan.

The Journal then went on to say that Bakrie sold just under
half of the stake back to Freeport one year later at roughly
double the price per share. The transaction yielded a 500 percent
profit on the initial investment of about $40 million.

Bakrie sold its remaining 5.1 percent share to PT Nusamba in
1996. Nusamba is controlled by former President Soeharto's crony
Mohammad (Bob) Hassan.

Winters' allegations have upset Ginandjar, who has denied any
wrongdoing.

President B.J. Habibie has ordered the Attorney General to
charge Winters with defaming the Indonesian government.

Winters, a professor of political economy at Northwestern
University in Chicago, has already returned home. He was quoted
by Antara on Thursday as saying he would not withdraw his
allegations.

"I didn't explicitly say Ginandjar was implicated in
corruption. Anyway, I will not withdraw what I have said. My
allegations are based on the reports of Econit (a local firm of
consultants)," Winters said.

Freeport Indonesia said on Thursday that it had no comment to
make on Winters' statement.

"Winters has already gone on record stating that Winters was
only repeating what Winters has read in reports written by others
and did not know the details," Freeport said in a statement.

In a related development, Tadjuddin Noor Said, a former
legislator who was in charge of the House of Representatives'
committee which reviewed Freeport Indonesia's contract of works,
told The Jakarta Post that Freeport's contract was reviewed
according to the correct procedures.

He said the House supported requiring McMoRan to divest a
further 10 percent of its shares in Freeport Indonesia to the
people of this country.

"Unfortunately, neither the government nor state and private
enterprises were interested. Thus, when Bakrie came to take the
shares, we thought him some kind of a savior," Tadjuddin said.
(jsk)