Lawyer downplays BPK probe into Semen Gresik

Lawyer downplays BPK probe into Semen Gresik

Sari P. Setiogi, The Jakarta Post, Jakarta

A lawyer representing publicly listed cement giant PT Semen
Gresik downplayed on Monday the probe being conducted by the
Supreme Audit Agency (BPK) into the company's past acquisition of
PT Semen Padang and PT Semen Tonasa.

"All the papers we have on the acquisition process is legal.
Moreover, it is not within BPK's authority to decide whether the
process is legal or not," Todung Mulya Lubis from Lubis, Santosa
& Maulana Law Office told The Jakarta Post.

He said only a court could make a decision regarding the
legality of the acquisition process.

The three firms are state-owned cement companies. The
acquisitions were made in 1995 to make Semen Gresik the country's
largest cement producer.

Last Friday, BPK senior auditor Amrin Siregar said the agency
was conducting an investigation into the acquisition process on
the grounds that the transaction might have not been legal,
because it was not supported by a government regulation.

He said according to Law No. 9/1969 and Government Regulation
No. 12/1969, every allocation of an asset in a state-owned
company should be supported by a government regulation.

"If the process was illegal, how it could get listed on the
Jakarta Stock Exchange? The firm got in there (JSX) after a due
diligent process," said Todung.

Amrin said the BPK had sought clarification from the
independent accountant who had audited Semen Gresik's 1995
financial accounts, Sarwoko & Sandjaja Public Accountants, as to
why the absence of the required government regulation was not
explained in the audit report.

This is not the first time that the BPK has launched a probe
into this issue. In 2001 and 2002, the agency sent an official
letter to the Ministry of Finance and the Office of the State
Minister of State Enterprises requesting an explanation on the
absence of the government regulation.

As of today, there has been no response from either office.

In 1995, Semen Gresik acquired Rp 1.1 trillion shares in Semen
Padang, West Sumatra, and Semen Tonasa, South Sulawesi, which
were consolidated into Semen Gresik.

In 1998, Mexican cement giant Cemex SA de CV, the world's
third-largest cement maker, acquired more than 25 percent of
shares in Semen Gresik, which went public in 1991.

The government still owns a 51 percent stake in Semen Gresik,
while the remainder is held by the public.