East Kalimantan lawyer says KPC legal bout to end in one month
East Kalimantan lawyer says KPC legal bout to end in one month
Moch. N. Kurniawan, The Jakarta Post, Jakarta
A lawyer representing the East Kalimantan administration in a
lawsuit against coal mining firm PT Kaltim Prima Coal (KPC) said
the legal proceedings now blocking the sale of a 51 percent stake
in KPC would end in one month.
East Kalimantan's lawyer Toni Budidijaja expected the court to
come to a verdict within one month, a decision that he believed
would force KPC to pay the province compensation worth US$776
million.
According to him, the amount constitutes the earnings East
Kalimantan should have made if it owned a 51 percent stake in
KPC.
"There will probably be two or three more hearings before the
court can issue a verdict," Toni said over the weekend.
The province has been eying KPC's shares for over two years.
As yet, the coal mining company remains 100 percent owned by
Anglo Australian mining company Rio Tinto and American British
oil and gas company BP. Both share an equal stake in KPC.
Under their mining contracts, the two must divest a 51 percent
stake to local investors but disagreement with the central
government over when to sell and for how much has dragged out the
sale process.
Last year, East Kalimantan filed a lawsuit against KPC,
charging its owners were deliberately impeding the sale of the
company's stake to the province.
So far the court has been ruling in favor of East Kalimantan,
deciding to temporarily freeze the 51 percent stake in KPC.
The ruling comes just as KPC and the central government
clinched a deal on the price of the shares, blocking KPC from
making any sales offer including to East Kalimantan.
The province said it would drop the lawsuit only after it
received a formal offer for the stake, while KPC demanded the
lawsuit be dropped first before it would make an offer.
Both sides remain at loggerheads over who should make the
first move.
Nevertheless, KPC director Lex Graefe showed little concern
about the ongoing case.
"We're optimistic to win this case," he told The Jakarta Post
on Saturday, adding KPC would provide more evidence in the next
trials.
According to him, the East Kalimantan administration could not
bring KPC to court as the province was not a signing party to its
mining contract.
He added that KPC had no intention to delay the sale process,
arguing it had offered the share three times from 1998 through
2000 as ordered by contract.
"It's beyond our control if there's no sale after the offers,"
Graefe said, adding that the share offering for the year 2001 was
still underway.
According to the East Kalimantan administration, it should be
the one KPC must offer its shares to, but now other investors
have reportedly also shown interest in the stake.