Telkom, Indosat shareholders meetings to go on

JAKARTA (JP): Publicly listed telecommunications companies PT Telkom and PT Indosat will go ahead with their plans to hold shareholders meetings on Thursday despite the call from the House of Representatives to postpone the meetings.

Coordinating Minister for the Economy Rizal Ramli said on Wednesday that the government had decided to let both companies go ahead with their shareholders' meetings.

The minister said that the two companies would also not change the meeting agenda, which includes the proposed US$1.5 billion transaction to eliminate their cross ownership.

"How would it look (to the world) if a (public company's) shareholders' meeting is determined by the legislature?" he told the media after a meeting with the management of Telkom and Indosat.

He again stressed the termination of the two companies' cross ownership was necessary for the two companies to become full- fledged telecommunications operators, as outlined in the government's telecommunications blue print.

Ramli, Minister of Communications Agum Gumelar, Director General of State-owned Enterprises I. Nyoman Tjager, as well the directors of Telkom and Indosat, met on Wednesday morning to discuss the House's request.

Also present at the meeting were representatives of Telkom Workers Union (Sekar).

The House's joint team comprising Commission IV for infrastructure and transportation, and Commission IX for financial and development planning urged the government to delay the two telecommunications giants' shareholders meeting until the team announced its stance on the transactions.

The team and the government officials planned to hold a meeting on Tuesday to discuss the controversial transactions between Indosat and Telkom. However, the meeting was canceled due to the absence of Minister of Finance Prijadi Praptosuhardjo, who was attending a meeting of the Asian Development Bank in Honolulu, Hawaii.

Telkom's vice president for corporate communications Dodi Amarudien said postponing a shareholders' meeting would not only greatly damage the country's image in the eyes of the international community, but also reduce foreign investors' confidence in Indonesia.

"In addition, the price of Telkom's and Indosat's stocks would also drop," he said.

Telkom and Indosat shares fell to Rp 2,425 and Rp 8,300 respectively at intraday trading on Wednesday but later rebounded after Rizal's statement that the shareholders' meetings would not be postponed. Telkom ended the day lower at Rp 2,475, compared to Rp 2,500 at the previous day's close, while Indosat gained Rp 150 to close at Rp 8,700.

Telkom and Indosat agreed in February to a series of transactions amounting to $1.5 billion to effectively terminate their cross ownerships in several telecommunication companies, including cellular operators PT Telkomsel and PT Satelit Palapa Indonesia (Satelindo).

Included in the deal is the acquisition of Telkom's assets and operations in Central Java and Yogyakarta by Indosat for $375 million. The operation in the region is jointly managed by Telkom and PT Mitra Global Telekomunikasi Indonesia (MGTI).

This particular transaction brought strong reactions from Telkom's employees in the region, who feared massive layoffs would result from the takeover.

Telkom employees in Central Java and Yogyakarta under the Telkom Workers' Union (Sekar) launched a four-day strike beginning last Tuesday calling for the cancellation of the transaction.

More than 1,000 workers arrived from Central Java and Yogyakarta on Wednesday to demonstrate in front of the office of the Coordinating Minister for the Economy.

"Central Java for Telkom! ... Central Java for Telkom!" they yelled, each one wearing a headband with a picture of a crossed- out MOU (memorandum of understanding) on it.

The demonstrators then moved on to the office of the Minister of Communications.

Dodi Amarudien told journalists that they had come to a compromise with Sekar regarding the Central Java and Yogyakarta region.

"There will be more talks regarding the transaction from (the time of the) meeting until the closing date for the transaction at the end of January 2002," he said, adding that although that particular transaction would not be removed from the meeting's agenda, Sekar would have a say in determining the prerequisites of the transaction.

Chairman of Sekar's Central Java and Yogyakarta chapter Syahrul Akhyar, after the meeting, asked the demonstrators to go back to their base at Asrama Haji in Pondok Gede, East Jakarta, saying he will negotiate with the directors of Telkom about the details of their role in the shareholders' meeting. (tnt)