STT slams anti-trust agency head

The Jakarta Post ,  Jakarta   |  Sat, 11/03/2007 4:59 PM  |  Business

Andi Haswidi, The Jakarta Post, Jakarta

Lawyers representing Singapore Technologies Telemedia (STT) strongly criticized the KPPU business competition watchdog's chairman Friday for what they said were ethical breaches in his handling of the monopoly allegations against the company and its parent firm, Temasek.

""The KPPU chairman has repeatedly spoken openly to the media about information that is classified as confidential. His comments have also been biased, as if we had already been found guilty,"" STT lawyer Franz H. Winata told reporters Tuesday.

Franz said that KPPU chairman Muhammad Iqbal's comments on the allegations of cross-ownership and price-fixing against 10 firms, including Singapore's Temasek, STT, SingTel and a number of major local cellular operators were misleading and could damage the public's perception of the companies.

According to the regulations governing the KPPU, members of the anti-monopoly body are prohibited from divulging confidential information in an ongoing investigation until a final decision has been made in the case.

There were essentially two investigations conducted by the KPPU in this case: against Temasek for alleged violations of the anti-monopoly law due to its cross-ownership of the two largest cellular operators in the country -- Telkomsel and Indosat, and a price fixing allegation that involves Temasek, its subsidiaries and the local operators.

""The negative effects caused by the biased stance of the KPPU chairman can be seen from the KPPU's final investigation report, which consists of biased conclusions,"" Franz said.

The report, which has been circulating among journalist since the middle of last month, says that there are indications that Telkomsel and Indosat, which control more than 80 percent of the country's mobile phone market, have been involved in price fixing at the behest of Temasek.

STT, which is wholly owned by Temasek, indirectly owns 31.4 percent of Indosat through its subsidiary Asia Mobile Holdings (AMH). Meanwhile, 35 percent of Telkomsel's shares are held by SingTel, while Temasek owns a 56 percent stake in the company.

According to the anti-trust law, a company is not allowed to own shares in two or more companies operating in the telecommunications sector which have a combined market share of more than 50 percent.

Another STT lawyer, K. Shanmugan, of the Allen and Gledhill law firm, said that the most absurd of the allegations made by the KPPU was that STT and SingTel had been involved in a conspiracy to keep Indosat underdeveloped so as to promote the growth of Telkomsel's market share.

""It's entirely absurd to suggest that we would run Indosat into the ground to benefit Telkomsel,"" he said, while confirming that STT saw itself as a long-term investor in Indosat and would continue to add value to the company.

Both Telkomsel and Indosat have repeatedly denied all the allegations.

A special committee has been formed to examine the conclusions set out in the final investigation report and to question representatives of all ten firms. A final decision on the case will be announced by the middle of this month

Despite their complaints about ethical breaches, the team of lawyers said that they were not contemplating a lawsuit against Iqbal, but only demanding better and more balanced treatment by the KPPU of their client.

Speaking to The Jakarta Post about the alleged breach of ethics, Iqbal said that STT's motives in talking to the media were also questionable.

""We gave STT the opportunity to defend itself in front of the committee yesterday (Thursday). All of their responses have been noted and will be studied. So, just wait for the final decision,"" Iqbal said, while denying that he was biased or had used his position to influence the investigators.

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