No political motives behind SCTV takeover: Government

No political motives behind SCTV takeover: Government

JAKARTA (JP): The Ministry for the Empowerment of State
Enterprises dismissed on Monday allegations that the government's
plan to acquire a majority stake in the privately-run SCTV
television channel is driven by political motives.

"No, it is not politically motivated. The (planned) takeover
is based purely on a business deal," said Sofyan Djalil, an
assistant at the ministry.

Sofyan was commenting to The Jakarta Post on allegations that
the government had pressured state-owned Bank Bumi Daya (BBD) to
take over the station in a bid to legalize its way of controlling
SCTV news and editorial policies.

He said the government had not yet made a final decision on
the acquisition, which many mass media analysts have seen as an
attempt by the government to muzzle a critical media.

He added that the acquisition, which would allow the
government to take over the company's management, was one of the
options being mulled over by the government following SCTV's
failure to settle its Rp 250 billion debt to BBD, which matured
early this year.

Other options include liquidating the TV network or
restructuring the debt.

"Talks are underway; we do not know the best option yet," he
said.

The government, through BBD, reportedly plans to take over
52.5 percent of SCTV's shares, currently held by two businessmen,
Henry Pribadi and Sudwikatmono, a cousin of former president
Soeharto.

The remaining shares are held by another businessman close to
the Soeharto family, Peter Gontha.

According to Djalil, the television channel defaulted on its
debt of Rp 250 billion (US$33.3 million) to BBD.

However, the SCTV news department said in a statement that the
planned acquisition was questionable and could not be detached
from its news programming policy, which was considered critical
of the Habibie administration.

Sources at the station linked the planned acquisition to
external pressure to replace news programming director Riza
Primadi with someone the government could control.

The government, according to the statement, considered the
station's reporting of the violent clashes on Nov. 12 and 13
between the military and students protesting the Special Session
of the People's Consultative Assembly as quite negative toward
the government.

"The government seems to be unhappy with the reporting, and we
in the news department suspect that the government is behind the
acquisition move," the statement added.

"We cannot escape the notion that the government intends to
use SCTV's failure to settle its debt as an opportunity to take
over the station and control its news programming policy, even
though the debt has been restructured," it added.

The Liputan 6 news program has won praise from the public for
its bold and extensive coverage of the bloody clashes between the
military and student protesters on Nov. 12 and 13 which took
dozens of lives, including the lives of many students.

The statement said that SCTV and BBD agreed on April 30 to a
debt restructuring deal, whereby the debt maturity was
rescheduled by two years to 10 years and three months, and
interest and principal payments would begin in the fourth quarter
of 1999.

BBD also agreed on Nov.9 to convert the station's offshore
debt into rupiah, it said.

The bank did not give any indication of the takeover in its
latest correspondence with the station on Nov. 9, the statement
said.

However, Sofyan denies any knowledge of such a restructuring
deal.

"If they have reached a deal to restructure the debt, why is
there a problem?" he said.

Sofyan insisted that a demand for a change in the company's
executive board was normal in cases of acquisition.

"It's the normal practice for creditor banks to demand debtors
to restructure their management as part of financial management
restructuring," Sofyan said.

The SCTV news department staff said that they could accept the
takeover as long as there is no government interference with its
policy regarding news reporting.

"In principle, SCTV's employees have no reservations about the
change in the shareholders' composition as long as the Liputan 6
news program is allowed (by the new shareholders) to maintain its
independence," the statement said. (aly/jsk/rms)