House says govt broke law in Newmont stake purchase

The House of Representatives and Supreme Audit Agency (BPK) have asked the government to cancel the purchase by the government of the remaining 7 percent, worth US$246.8 million, of miner PT Newmont Nusa Tenggara (NNT) since the funds were taken from the state budget.

House Commission XI on finance and banking affairs expressed its objection to the Finance Ministry move to buy the gold mining company’ shares, which it said was against the law on finance.

“The budget allocation for the share purchase requires approval from the House, and [Commission XI] and Commission VII on mining and the environment have agreed to reject the plan,” Commission XI deputy chairman Hari Azhar Azis said Tuesday.

On Friday, the BPK revealed to the House that the funds earmarked to purchase the miner’s shares were taken from the state budget.

Khomaidi, the deputy executive director of the Reforminer Institute, called on Finance Minister Agus Martowardodjo, the BPK and state investment agency (PIP) to go to the negotiating table with Newmont management to discuss the divestment arrangements again and make sure the process was clear and clean.

“The divestment process must run smoothly to avoid any legal violations or any lawsuits. This could influence the proposed work contract with Newmont,” he said.

Satya W. Yudha, a member of the mining and environmental commission, said his commission and the finance and banking commission had discussed the issue and had concluded that the purchase by the PIP of Newmont shares was against the state finance law and state treasurer law.

Earlier, the Finance Ministry, through the PIP, bought a 7 percent stake

worth US$246.8 million in NNT that was divested by the company's foreign shareholders.