Pertamina eyes stake in Tugu Pratama
JAKARTA (JP): State oil and gas company Pertamina is set to buy out PT Nusantara Ampera Bhakti's (Nusamba) stake in insurance company PT Tugu Pratama Indonesia as part of the efforts to eliminate traces of collusion, corruption and nepotism in the company.
Pertamina president Martiono Hadianto said on Wednesday that Pertamina would increase its stake in the company to 80 percent from 45 percent at present, while the remaining 20 percent stake would be retained by its pension fund.
"We will realize the plan in the company's shareholders meeting next week," Martiono said in a hearing with the House of Representatives Commission V for mines and energy, industry and trade.
Martiono, however, said Pertamina had yet to negotiate the value of the shares with Nusamba.
Nusamba currently owns 35 percent of the company.
Former president Soeharto's eldest son Sigit Hardjojudanto and Soeharto's golfing partner Mohammad "Bob" Hasan each own 10 percent of Nusamba. Soeharto-linked foundations, Dakab, Dharmais and Supersemar, respectively have 30 percent, 25 percent and 25 percent shares.
The government has taken over the assets of all of Soeharto's foundations.
According to Martiono, Nusamba, despite being a minority shareholder, has long controlled the management of Tugu.
Martiono said during the shareholders meeting he would also reshuffle Tugu's board of directors and remove all of Hasan's cronies from the company.
Tugu, founded in 1981, has become the country's largest insurance company mainly owing to its monopoly of indemnity insurance for the oil and gas industry for more than a decade.
Pertamina's former president Soegianto earlier said that Pertamina would not automatically extend its insurance contracts with Tugu but would offer them for competitive tender.
But Martiono recently sparked controversy by extending indemnity insurance contracts with Tugu for the operation and facilities of all of the country's foreign oil and gas contractors.
Martiono defended his move, arguing that if the insurance contracts were put up for open bidding, foreign insurance companies would most likely edge out their local counterparts, which lack expertise in oil and gas indemnity insurance.
To date, out of all local insurance companies, only Tugu has any technical skill in indemnity insurance for the oil and gas industry in the country, he added.
Legislators, who initially criticized Martiono, supported him during the hearing.
"I can accept Pertamina's move to extend insurance contracts with Tugu provided that Nusamba no longer has shares in the company and the company's board of directors is changed," Priyo Budi Santoso of the ruling Golkar party said.
He noted, however, that Tugu should no longer monopolize indemnity insurance in the oil and gas industry given that the House recently endorsed the antimonopoly law.
Martiono said Tugu would give other local insurance companies the chance to obtain contracts from the country's oil and gas industry, but said that Tugu would remain a leader as it was the most experienced in the sector.
"We shall ask the Directorate General of the State Budget at the Ministry of Finance (which supervises the insurance sector) to select local insurance companies which have the financial capability to take part in insuring the country's oil and gas industry," Martiono said.
Martiono said Pertamina also planned to tie up with an international insurance company as a strategic partner in Tugu so that the company was not only strong on the domestic front, but would also have a wide international network to expand its business. (jsk)