Wed, 07 May 2003

Semen Gresik lawyers question court decision

M. Taufiqurrahman, The Jakarta Post, Jakarta

Lawyers from PT Semen Gresik challenged on Tuesday a decision by the Padang District Court in West Sumatra in favor of a local foundation that opposes the acquisition of Semen Padang by Indonesia's largest cement company.

The court rejected on Monday a motion by the Semen Gresik lawyers calling into question the legality of a lawsuit filed by the foundation, Yayasan Minang Mainbau, against the purchase of Semen Padang by Semen Gresik.

The court is expected to hand down a provisional ruling this Friday on the legality of the sale of Semen Padang to its parent company, Semen Gresik.

"There is no legal basis for the foundation to file a lawsuit because it never signed a legal contract with Semen Gresik," Todung Mulya Lubis, one of the lawyers representing Semen Gresik said, adding that the foundation also had no business contracts with the publicly listed company.

Semen Gresik owns 99 percent of Semen Padang and is the country's largest cement producer, with a total capacity of about 17.25 million metric tons (including production from subsidiary PT Semen Tonasa). Semen Gresik is 51 percent owned by the government, 23.46 percent by the public and 25.53 percent by Mexican cement producer Cemex.

Todung said that by rejecting the Semen Gresik lawyers' motion, the court had violated the due process of the law.

He said the court's decision could set a bad precedent, signaling to residents of resource-rich provinces that they are free to set up foundations for the sole purpose of filing lawsuits against the presence of foreign companies.

"This will simply scare off investors from investing their capital in the country," the lawyer said.

Yayasan Minang Maimbau is only one among many parties -- including local politicians, local government officials and employees of Semen Padang -- demanding that the central government spin off Semen Padang from Semen Gresik.

It is thought that the foundation filed the lawsuit to disrupt a long-overdue extraordinary shareholders meeting scheduled for next Monday to replace Semen Padang's management.

Despite the legal maneuverings of the foundation, Semen Gresik president Satriyo played down the possibility that the shareholders meeting would be called off.

"It will still be held on May 9 as scheduled," he told reporters.

When asked about the latest legal developments, he said: "We are tired of this legal battle, and as far as Semen Padang is concerned what took place during the hearing is merely a repeat of an old pattern."

Semen Gresik's lawyers said they would send a brief to the Supreme Court on Wednesday outlining what they call violations of the legal process by the district court.

The price of Semen Gresik shares rose to Rp 7,700 per share on Tuesday from Rp 7,600 the previous day on the Jakarta Stock Exchange amid overall positive market sentiment.