Telkom rejects call to hold shareholders meet

Telkom rejects call to hold shareholders meet

JAKARTA (JP): PT Telkom turned down on Friday the call made by
State Minister of Investment and State Enterprises Laksamana
Sukardi to hold an extraordinary shareholders meeting to appoint
a new president and commissioner.

President of the publicly listed company, A.A. Nasution, said
Telkom could not hold the meeting because Laksamana failed to
give clear and significant reasons for the management reshuffle.

"We are not going to hold any extraordinary meeting if there
is no clear and significant reason or order given by all
shareholders, not only the government, to do so," he said.

He said Laksamana, whose office represented Indonesian
government as the majority shareholder with approximately 66
percent, had apparently not informed the other investors of
Telkom about his demand for a reshuffle.

Nasution warned that before their terms expired, members of
the board of directors and commissioners, could only be replaced
when he or she personally tendered a resignation, violated the
law or regulations or died.

"If (Laksamana) states in the letter that shareholders want
Telkom to immediately hold an extraordinary meeting to sack
Nasution because the latter has failed and caused the company to
suffer losses, then we are certainly will arrange for the
meeting," he said.

Telkom's chief commissioner Anwar Supriadi supported
Nasution's stance and demanded Laksamana to clarify the matter.

Nasution declined to comment whether Laksamana's instruction
for reshuffle was a follow up of a recent announcement made by
President Abdurrahman Wahid on the government's plan to replace
the president of seven state-owned companies.

Nasution, whose tenure will end in the next couple of months,
said Laksamana's request for the extraordinary meeting and
management reshuffle arrived early this week.

"This is the third time the office of State Enterprises
Development Ministry has sent such a letter. The two previous
letters were sent by the previous minister Tanri Abeng," he said,
adding that the previous letters were also rejected by Telkom for
the same reasons it gave to Laksamana.

Telkom, which listed its shares on the Jakarta, New York and
London Stock Exchanges, is scheduled to hold a general meeting
for its shareholders in April.

Separately, a source in the telecommunications industry said
that Laksamana had also ordered the board of directors of another
state-owned company, the publicly listed international direct
dial operator PT Indosat, to hold an extraordinary meeting to
appoint a new president and commissioner.

Indosat's president Indra Setiawan, who has only been in the
position for just over four months, said the company had not
received Laksamana's letter and declined to comment on the plan
for reshuffle.

The source said the government had apparently prepared several
candidates as Indra's replacement, including a former director of
the computer company IBM Indonesia.

According to the source, several candidates have also been
prepared for Telkom's top management seat. The strong candidates
include Telkom's former director Wisnu Marantika.

Indosat reported early this week it had booked a 21.5 percent
increase in its net income last year to reach Rp 1.39 trillion
(US$195.77 million). Telkom is scheduled to announce its 1999
result next week. (cst)