Telkom, Indosat shareholders meetings to go on

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)