Temasek 'guilty' even before verdict issued

By Azhar Ghani, Indonesia Bureau Chief
ST Forum, The Straits Times, October 11, 2007


JAKARTA - THE final verdict in an investigation into Singapore's Temasek Holding's investments in the telecommunications sector in Indonesia has apparently been reached long before it was due, raising fresh questions over the process.

Following a report on Tuesday that it had already been found guilty of violating the country's anti-monopoly laws, Temasek said yesterday it was surprised to hear that confidential findings of the case had been shared with the media before the ruling, which is expected next month.

Calling claims against the company 'baseless and without merit', Temasek, through its Indonesian lawyer Todong Mulya, also said it would 'vigorously defend its legal rights at all opportunities and in all available legal forums'.

A five-man council, formed by Indonesia's anti-monopoly watchdog, the Business Competition Supervisory Commission (KPPU), is set to rule on whether Temasek violated anti-monopoly laws through its indirect shares in two of Indonesia's top telcos - PT Indosat and PT Telkomsel.

But the council, which will function on majority rule and not consensus, is dominated by those who appear to be already convinced of Temasek's guilt.

Three of its members were among four investigators in a five-man KPPU probe team that had found 'indications of guilt' when delving into the allegations against the Singapore company last December. One of them, lawyer Syamsul Maarif, will even be chairing the new panel.

The council will rule on the case after deliberating on all evidence, including the investigation report submitted on Sept 27 by the probe team, as well as Temasek's defence, which would be submitted in about two weeks.

It is expected to deliver its verdict and a decision on possible sanctions in mid-November - ending almost a year of deliberations on the matter.

The case has been contentious from the start, being linked to various purported moves by politically linked parties to oust Temasek subsidiary ST Telemedia (STT) from Indosat. A guilty verdict by the KPPU could possibly legally force STT to divest.

And the formation of the council to rule on the case has added to the controversy.

For one thing, KPPU chairman Muhammad Iqbal has been making public pronouncements on Temasek's supposed guilt. His premature statements, the latest of which was made on Monday, have already been criticised by the sole dissenting voice in the KPPU probe panel, economist Benny Pasaribu.

He told the Kontan business daily: 'This is not being neutral before the council makes its decision. It's a form of interference.'

Several legislators have already warned that they would be monitoring the case closely for indications of foul play.