JAKARTA - INDONESIA'S investment agency chief yesterday rejected suggestions that a court ruling against Temasek Holdings for alleged breach of anti-monopoly laws would deter foreign investors.
Investment Coordinating Agency chief Muhammad Lutfi said the government had no power to influence the judicial process and expressed confidence that the ruling would not damage Indonesia's investment credentials.
A state appeal court earlier this month upheld a ruling by the competition watchdog, which ordered the Singapore investment company to divest itself of its stake in one of Indonesia's two largest telecoms operators, and gave it only 12 months to comply.
The decision has been heavily criticised in business circles in Singapore as well as in Indonesia, which is desperately trying to attract foreign investment.
But Mr Muhammad Lutfi said the criticism was unjustified.
'Decisions were made by two different institutions, and both found Temasek guilty,' he told news agency Agence France-Presse.
He said the competition watchdog, the Commission for the Supervision of Business Competition, better known by its Indonesian initials KPPU, was established to improve the investment climate in Indonesia and was only doing its job.
'I don't think that this will affect investment,' he said.
The KPPU said last November that Temasek was guilty of engaging in monopolistic practices and anti- competitive behaviour in Indonesia's cellular market through its stakes in two Indonesian telephone operators - Telkomsel and Indosat.
Indosat is 41 per cent-owned by Asia Mobile Holdings, which is a 75 per cent-held subsidiary of Singapore Technologies (ST) Telemedia. ST Telemedia is fully owned by Temasek.
Temasek indirectly holds 35 per cent of Telkomsel via its 56 per cent-owned unit, SingTel.
This article was first published in The Straits Times on May 20, 2008
