VP denies talk of split between Mulyani, SBY

Adianto P. Simamora ,  The Jakarta Post ,  Jakarta   |  Sat, 11/08/2008 11:52 AM  |  Headlines

Vice President Jusuf Kalla has strongly denied speculation that Finance Minister Sri Mulyani Indrawati had threatened to resign over a debacle involving a coal company owned by the Bakrie family, the nation's richest and most politically wired.

"(The speculation) is not true. There is no difference of opinion among government officials over the issue," Kalla said at a press conference Friday afternoon.

"The fact is Mulyani is due to go to the United States and Brazil (to attend the G-20 meeting). She also had a meeting with President (Susilo Bambang) Yudhoyono before her trip."

On Thursday, Mulyani flew to Brazil for a 12-day trip that will see her meet Yudhoyono once again in Washington. Her duties have been temporarily handed over to State Minister for State Enterprises Sofyan Djalil -- Yudhoyono's campaign manager for the 2004 presidential election.

As reported earlier, Mulyani was protesting moves by Yudhoyono, Kalla and Sofyan in overturning her decision Wednesday to end a one-month trading suspension in PT Bumi Resources, the crown jewel of the Bakrie conglomerate.

"Mulyani was so devastated, she skipped the Indonesia Stock Exchange (IDX) financial awards and a state dinner with the visiting Madagascar president that night. Her husband had to come to her office to calm her down," said a source at the Finance Ministry.

Mulyani then went to the Presidential Palace late that night, only leaving at 2:00 a.m. on Thursday, to protest the intervention and threaten to resign unless Yudhoyono agreed to restore her authority and lift the suspension, the source said.

Trading in Bumi shares resumed on Thursday, promptly plunging by 9.2 percent to Rp 1,975 as investors sold to meet margin calls on the stock. As the drop neared the 10 percent threshold, Bumi's hammering was automatically paused by the IDX.

The shares continued their nosedive on Friday, falling 9.87 percent to Rp 1,780 before the IDX's cutoff mechanism saved it once again.

Kalla insisted a trading suspension in Bumi shares was needed, adding it was common practice around the world.

"The trading suspension is in line with regulations to prevent sharp falls in share prices and ease market speculation. It also protects the interests of investors, publicly listed companies and the overall economy," he said.

"A suspension lifting should be applied if the stock market is in better condition or if there is already disclosure," said Kalla, who owes his exposure on the national scene in the late 1990s to the Bakrie family, headed by Coordinating Minister for the People's Welfare Aburizal Bakrie.

PT Bakrie & Brothers, the nation's largest publicly listed investment firm, announced on Nov. 1 that Northstar Pacific, a local unit of U.S. buyout giant Texas Pacific Group, had agreed to pay US$1.3 billion for its 35 percent stake in Bumi.

Northstar, believed to be teaming up with state mining firms, must wrap up the deal within 28 days.

Analysts say lifting the suspension would have harmed the deal, with the Bumi stake expected to be heavily devalued as investors promptly sold their shares over worries their value could drop further because of continuing uncertainty over Bakrie's debt arrangements.

Help from the government will mean a lot for the Bakrie family, given its role as a key financier of Yudhoyono's 2004 presidential campaign.

State enterprises minister Sofyan said he would do his best as acting finance minister to help safeguard the public interest.

"As finance minister ad interim, what I will do is keep applying the current policies and sign urgent policies if needed. Hopefully everything will go well," he said.

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