Govt vows to intervene in KPC legal dispute
Govt vows to intervene in KPC legal dispute
The Jakarta Post, Jakarta
The central government is set to intervene in the legal battle
between East Kalimantan-based coal mining giant PT Kaltim Prima
Coal (KPC) and the provincial administration in a bid to put an
end to the long-running fiasco in the divestment of the KPC stake
by shareholders.
Secretary-general of the mines and energy ministry Djoko
Darmono said that the government would file an "intervention
lawsuit" if the East Kalimantan government did not withdraw its
lawsuit against KPC by the end of this month.
"The intervention suit is probably not a popular step, but it
is the only way to ensure that the divestment of the 51 percent
stake in KPC can materialize quickly," he was quoted by Antara as
saying.
KPC is equally owned by Rio Tinto mining group and BP Plc.
energy giant. The two shareholders are required to divest a
controlling stake in the company to local investors.
But the divestment program has been delayed due to various
problems. The latest was the lawsuit filed by the East Kalimantan
administration at the South Jakarta District Court against KPC
and its shareholders. The Court then ruled in favor of East
Kalimantan, ordering the sequester of shareholders' assets
including the KPC stake that must be unloaded.
There have been rising calls for the government to intervene
and overturn the court's ruling.
The KPC shareholders were supposed to divest a 51 percent
stake in the company by the end of June, but it had to be delayed
again because of the court's ruling. The new deadline for the
divestment program is end of July.
KPC has noted that it would not carry out the divestment,
unless the provincial administration revoked the litigation
process.
Under its contract with the central government, KPC must
divest 51 percent shares to local investors which may either be
the Indonesian government, state-owned companies, Indonesian-
controlled private firms or Indonesian citizens after 10 years of
production.
Problems began when the East Kalimantan administration
demanded it be given preference as a bidder for the KPC stake.