KPPU loses legal battle in Indomobil case

A'an Suryana, The Jakarta Post, Jakarta

The Business Competition Supervisory Commission (KPPU) has lost a legal battle against parties it ruled to have manipulated the Indomobil sale last year.

The Supreme Court said that the KKPU ruling was legally flawed because the anti-monopoly watchdog used a statement "For the shake of justice, based on the belief in one Supreme God" in its decree.

"KPPU is not a legal body, so it does not have the rights to include this statement in its ruling. There is no law that gives rights to KPPU to use the statement," senior judge Paulus Effendy Lotulung quoted as saying on Thursday by hukum-online.com news portal.

He urged KPPU to renew the ruling.

He did not say when the Supreme Court decision was made.

KPPU could not comment on the decision, claiming that it had not received the ruling yet.

KPPU ruled in May last year that six parties had conspired during the sale process of the government's 72 percent stake in the publicly-listed PT Indomobil Sukses International, the country's second largest car maker.

A consortium led by PT Trimegah Securities won the stake for a cheap price. There had been allegations that members of the consortium were basically linked to Salim Group, the former owner of the car manufacturer. The group transferred its stake in the car company to the government to repay the Salim family's debt to the central bank. The government has banned this family from repurchasing the asset.

But three parties including Trimegah, Deloitte Touche Tohmatsu (the adviser of the government in the sale process), and PT Bhakti Asset Management (consortium member) alleged by KPPU to be involved in the conspiracy had protested the ruling and won the case at the Central Jakarta District Court and the State Administrative Court.

KPPU then filed an appeal with the Supreme Court.

Many had earlier doubted that the local court could handle the high profile Indomobil scandal because the judges lack both the quality and experience in understanding complex monopoly issues and modern business practices.

There has also been a strong perception that the local courts were corrupt.

The Indomobil case erupted after the sale of the Indomobil stake was conducted in a very short period and resulted only in a relatively small amount of proceeds. The quick sale process has raised concern that other bidders could not have sufficient time to make proper assessment before making an offer.

KPPU then launched an investigation and found six parties guilty ordering them to pay penalties.

The Indomobil case is seen as a litmus test of whether the antitrust body really has the teeth to protect the market and business sector from unfair competition.

It is also the first major case handled by the commission within the enforcement of Law No.5/1999 on the prohibition of monopolistic practices and unfair business competition.

Elsewhere, Paulus also said that the Supreme Court had overturned the ruling of the Central Jakarta District Court because KPPU was not a legal entity and therefore had no rights to perform in the court.