T

he nation’s business competition watchdog has not received a notification letter yet from three firms involved in the merger of two national television channels, SCTV and Indosiar, despite their deal announcement to the public more than a week ago.

Instead, merger plans of the firms—parent company Elang Mahkota Teknologi and its subsidiary that operates the SCTV channel, Surya Citra Media, as well as Indosiar Karya Media—are to be assessed by the Business Competition Supervisory Commission (KPPU) and the Indonesian Broadcasting Commission (KPI), to determine if the corporate action creates a monopoly in the broadcasting industry.

“We don’t know the model of their merger plans so we can’t say if it violates the antimonopoly law. We are waiting for their notification, we haven’t received it yet,” KPPU chairman Nawir Messi told The Jakarta Post via telephone on Monday, citing a government regulation, which requires presenting a notification to the business watchdog when mergers or acquisitions are to take place.

The 2010 government regulation requires all companies in the country to send the notification 30 days at the latest after the legal and material processes have been accomplished by the firms involved, he added.

Lawyer Hinca Pandjaitan said that all institutions involved, including the Communications and Information Technology Ministry, the capital market watchdog and the KPI should stop the merger plan because it violated the country’s broadcasting law.

He said he would sue these institutions for allowing a company to have direct control in the distribution of information through the radio frequency dedicated for public use.

KPI member Mochamad Riyanto said his team had scheduled a meeting with the KPPU, hoping that the two institutions could discuss the Indosiar-SCTV merger plans this week.

He said that it would discuss the possible impact of the merger on the country’s broadcasting industry in general. “We need to formulate the merger because it includes a broadcasting agency with a frequency for the public,” Riyanto said after meeting with officials of the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) and the Communications and Information Technology Ministry.

Gonthor Ryantory Aziz, Bapepam-LK head of the financial report inspection for service companies division, said the capital market authority was only responsible for the acquisition process. “To determine whether there have been monopoly practices, we pass it on to the KPPU,” he said.

The three firms announced their merger plan earlier this month. In the merger, Elang Mahkota will spend Rp 496.54 billion funds for 551.71 million shares of Indosiar or at Rp 900 apiece. Elang Mahkota will then merge Indosiar into its subsidiary SCTV.

Indosiar shares traded at Rp 910 apiece on Monday, down 2.2 percent from Rp 930 at the beginning of this year. Indosiar has a total market capitalization of Rp 1.8 trillion.

Indonesia currently has 11 national television channels.

Both SCTV and Indosiar serve the mid- to low-income sector, mainly airing soap operas, infotainment and general news. (lnd)