T

he government’s purchase of a 7 percent stake in copper and gold mining company PT Newmont Nusa Tenggara (NNT) requires approval from the House of Representatives, an audit by the Supreme Audit Agency (BPK) maintains.

The State Investment Agency (PIP) represented the government in the controversial purchase, while legislators, primarily within the Golkar Party, suggested the shares should be absorbed by the regional administration, which already owned a 24 percent stake through a joint venture with the Bakrie Group’s Multicapital.

BPK deputy chairman Hasan Bisri said the 2003 State Budget Law and the 2004 Treasury Law required the funds be allocated from the state budget, as the purchase was considered a closed government capital participation for private firms.

“The funds to buy a stake in NNT have to be regulated according to the state budget and a governmental decree after obtaining approval from the House,” he said in a telephone interview on Monday.

The treasury law stipulates that the government can carry out long-term investments in the form of stakes, bonds and direct investments that are regulated by governmental decrees. That also applies to the government’s capital participation in a state, regional or private company.

Finance Minister Agus Martowardojo, who has pledged to step down if proven wrong in the Newmont shares purchase, said he had not received the BPK audit results but remained “confident that we had the legal grounds to purchase Newmont’s 7 percent stake without the House’s approval”.

“There were two alternatives in the Finance Ministry regarding this investment,” he said, citing the purchase of Newmont’s shares as a non-permanent capital participation according to article 41 of the 2004 Treasury Law, which did not require House approval, rather than permanent capital participation, which would have required the House’s approval.

Harry Azhar Aziz, lawmaker with Golkar and deputy chairman of the House’s Commission XI overseeing finances, who has strongly opposed the government’s plan in a number of meetings, said the sales purchase should not be resumed because “the Finance Minister insisted on not seeking House approval”.

NNT spokesman Rubi Purnomo, whose company has not received information about the BPK audit, said the firm would stick with the US$246.8 million sales-purchase agreement (SPA) with the government’s PIP in May 2011, although the deal would not be activated until gaining approval from the Energy and Mineral Resources Ministry and the Investment Coordinating Board (BKPM).

“We hope the investment process can be completed for the sake of the government and the people of Indonesia, as well as other related stakeholders,” he said in a text message sent to The Jakarta Post.

Rumors have been rife that Golkar politicians were pushing for Agus’ removal from the Cabinet in the recent reshuffle, primarily due to his refusal to allow the Bakrie-linked company to secure a stake in Newmont.

The head of the Bakrie family, Aburizal Bakrie, is the chairman of the Golkar Party, which supports President Susilo Bambang Yudhoyono’s coalition government.