Top exec did not quit because of Temasek

But watchdog cites resignation as proof that company broke anti-monopoly law

By Salim Osman, Indonesia Correspondent
ST Forum, The Straits Times, October 24, 2007


JAKARTA - IN THE latest twist to the long- running Indosat saga, an Indonesian regulatory body is citing the sudden resignation of a top company executive to back up its claims that Temasek Holdings broke the country's antitrust laws.

It is alleging this even though the executive, Mr Hasnul Suhaimi, has denied it.

The resignation of Mr Hasnul was the latest in a series of leaks splashed in the Indonesian press from a supposedly confidential report that alleges Temasek Holdings has broken laws.

The business daily Kontan reported yesterday that Mr Hasnul resigned in May last year as president director of Indosat because of 'interference' from Temasek, which indirectly holds a substantial stake in the company.

The anti-monopoly watchdog Business Competition Supervisory Commission (KPPU) raised the issue of Mr Hasnul's resignation in its case against Temasek, which has stakes in two telephone companies, Indosat and Telkomsel, in an arrangement that the KPPU said violates Indonesia's anti-monopoly laws.

Temasek has an indirect stake in Telkomsel through Singtel, which owns 35 per cent of the Indonesian telco.

Separately, Temasek - through ST Telemedia - owns 75 per cent of Asia Mobile Holdings, which has a 40 per cent stake in Indosat.

The KPPU is reported to be using Mr Hasnul's resignation to prove that Temasek interfered in the running of Indosat and thus breached the anti-monopoly law.

Quoting the team's confidential report, the Kontan newspaper said that Mr Hasnul stepped down because his Singaporean deputy, Dr Kaizad Heerje, was in fact running the company.

'The president director is only acting as a symbol while the deputy president director controls Indosat,' it said, quoting the report which has not been officially released.

Dr Kaizad was also said to have changed Indosat's procurement systems, something previously handled by Mr Hasnul.

Dr Kaizad, who was appointed deputy president director of Indosat in December 2005, is a former senior vice-president of ST Telemedia.

Mr Hasnul, who is now the president director of another telco, was not available for comment but he told Kontan that he did not resign because of his deputy.

'I left the company because I felt that I could no longer offer any contribution that would be of value to the company's needs,' he said.

ST Telemedia's senior vice- president (strategic relations and corporate communications), Mrs Kuan Kwee Jee, responded to the reports at a media briefing here yesterday.

She said that Temasek, ST Telemedia and SingTel were separate companies with separate boards of directors.

'Temasek does not direct nor get involved in the business or operational decisions of ST Telemedia,' Mrs Kuan said.

She also noted that ST Telemedia did not have a majority share of Indosat.

Asked by Indonesian reporters why Mr Hasnul resigned from Indosat, she said: 'Only Hasnul can say, you should ask him.'

Indonesia's media has been reporting the details of the KPPU investigation with excerpts from its official report even though it has yet to be officially released.

According to the reports, Temasek has been found to have breached regulations and has been summoned to appear before a five-man council to respond to the findings.

The KPPU is not expected to issue a ruling before next month.

'If, after that, Temasek does not accept the decision, they can take the case to a district court,' commission chairman Mohamad Iqbal was quoted as saying by AFP on Monday.

If a district court ruled against it, Temasek could then appeal to Indonesia's Supreme Court, he added.