The government's reluctance to approve Mexican cement giant Cemex SA's sale of its stake in PT Semen Gresik to Rajawali Group has drawn criticism for possibly sabotaging a solution to the embarrassing four-year-old saga of Cemex's involvement in Indonesia.
Indications that the government is trying to arrange for local government firms to get some of the Cemex shares have also been slammed due to the likelihood of vested interests coming to the fore to the detriment of the country's cement industry.
"The government should, simply put, stop meddling in the business-to-business transaction between Cemex and Rajawali," said legislator Dradjad H. Wibowo of the National Mandate Party (PAN).
"Don't try to mess up this deal as it is the government itself that will benefit most from avoiding international arbitration."
Cemex, the world's third largest cement maker, announced last week that it would sell its 24.9 percent stake in SG to Rajawali for US$337 million, pending approval from the government as SG's majority shareholder. The deal is an apparent bid by Cemex to finally bring closure to its troubled investment in Indonesia's largest cement maker.
The Mexican cement producer has been left with a minority stake since 1998, when it first bought the stake, after the government reneged three years later on a contractual provision that should have allowed Cemex to acquire a majority stake in SG.
Cemex had earlier said it would take the case to international arbitration, seeking some $500 million in damages, but later decided to cut its losses and sell its stake in SG.
Following the announcement of this decision, Vice President Jusuf Kalla said last month that the government wanted to see the Cemex stake being bought by local investors rather than overseas ones, considering SG's strategic position in the country's cement industry.
However, since the offer of the shares to Rajawali, which is owned by local tycoon Peter Sondakh, the government has been prevaricating, and making noises about its previously agreed preferential right to buy back the shares.
State Minister for State Enterprises Sugiharto has reportedly even urged Rajawali to allocate 14 percent of the shares to local government firms in West Sumatra -- where SG unit PT Semen Padang is located.
Economist Faisal Basri of the University of Indonesia strongly criticized the apparent attempt to share out the Cemex stake with local government firms, and questioned the benefit of this to SG and the cement industry as a whole.
"We may be justified in suspecting that this is in reality a ploy to use the regional enterprises as mere puppets," he said.
"It may very well be the case that private firms that the government prefers to gain control of the Cemex shares are actually pulling the strings."
If this were the case, Faisal said, the cement industry could come under the control of a disguised cartel at the expense of the public, and the local government firms involved might well end up having to use local budget funds to cover any losses made by SG.
"If the government is trying to nationalize and control a particular industry because of vested interests, this is just plain wrong," he said.
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