Wed, 08 Dec 2010

From: The Jakarta Globe

By Faisal Maliki Baskoro
Jakarta. The battle over share ownership in Newmont Nusa Tenggara (NNT), a local unit of US mining giant Newmont, continued to heat up as the company announced its foreign shareholders have filed an appeal over a recent court ruling.

In a statement issued on Tuesday, NNT said that the foreign shareholders, Newmont Indonesia Limited (NIL) and the Nusa Tenggara Mining Corporation (NTMC), filed an appeal to the Judicial Commission and the Supreme Court on November 30 over a South Jakarta District Court ruling issued a day earlier.

The court ruled that 31 percent of the NNT stakes were to go to Pukuafu Indah, a local shareholder in the company.

According to the court, Pukuafu Indah is entitled to the 31 percent stake that NNT is required to divest this year under a 1986 contract. The court also ordered NNT to pay Pukuafu $26.6 million for material losses.

“Pukuafu did not have solid evidence to back its claim that it has the priority rights for the divested shares.

The South Jakarta District Court, without strong reasons, have given the right to the shares to Pukuafu,” Blake Rhodes, vice president and deputy general counsel of Newmont, said in a statement.

Rhodes said the court ruling contained procedural and legal violations.

“The ruling also did not touch on issues like how much Pukuafu had paid for the [disputed] shares, when was it paid, and to whom,” he said. “Pukuafu’s claims that it had paid for the shares are untrue and an act of defamation.”

Rhodes said that according to an arbitration court decision based on Newmont’s working contract in 2009, the Indonesian government holds the priority rights to buy the divested shares.

The arbitration court ordered Newmont to divest 51 percent of its shares to national entities. It sold 24 percent, to Multi Daerah Bersaing (MDB), a consortium of local companies. The remaining 7 percent is still pending.

Pukuafu claims to have purchased a 20 percent stake in NNT 1986, and an additional 31 percent in four stages from 2006 to 2009.

It says it paid Newmont for the 31 percent purchased between 2006 and 2009 but the shares were never transferred.

Newmont denies selling Pukuafu 31 percent of NNT, and says Pukuafu’s actual stake sits at 17.5 percent.

The district court ruling appears not to have had any effect on the IPO of Bumi Resources Mineral division BRM, which owns 24 percent of NNT through MDB.

The company reported that it was 29.89 times oversubscribed as investors searched for high returns in the mining sector.

BRM aims to gross Rp 3.6 trillion ($400 million) from floating 3.3 billion shares, or 18.16 percent of its stake.