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SingTel details appeal in Indonesian case

update Singapore carrier and its mobile arm SingTel Mobile explain their stance against claims the operators violated Indonesia's anti-competitive law.
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Written by Victoria Ho, Contributor on

update SINGAPORE--SingTel and its wholly-owned subsidiary SingTel Mobile said an Indonesian ruling that found both service providers guilty of violating an anti-monopoly law is baseless.

In a media briefing held here Friday, the Singapore carrier and mobile operator said they filed an appeal on Dec. 19 with the District Court of Central Jakarta, to dismiss the finding by Indonesia's competition watchdog Commission for the Supervision of Business Competition (KPPU).

The KPPU last month charged that Singapore's state-linked investment firm Temasek Holdings had violated Indonesia's anti-monopoly laws by indirectly holding stakes in the country's Indosat and PT Telkomsel.

Temasek owns a 54 percent stake in SingTel, which holds a 35 percent stake in PT Telkomsel, Indonesia's largest mobile operator. Singapore Technologies Telemedia, also a Temasek affiliate, owns some 40 percent of Indosat's shares through its own subsidiary Asia Mobile Holdings.

The KPPU is calling for Temasek and its affiliates to divest their stake in the two Indonesian companies.

According to legal counsel representing SingTel and SingTel Mobile, the charge fails because both companies are "not business actors" operating in Indonesia, since neither company owns majority shares in any Indonesian company.

The Singapore service providers added that KPPU does not have the jurisdiction to charge the operators with anti-competitive conduct, and had unlawfully distorted the meaning of Article 27(a) in Indonesia's anti-monopoly legislation.

Asserting that the KPPU's charge has "no basis", SingTel's lead counsel Sundaresh Menon, a senior partner at law firm Rajah & Tann, said at the briefing: "SingTel Mobile is a minority investor, and Telkomsel is controlled by the boards of Telkomsel, which comprises a majority of members appointed by PT Telkom.

"You cannot stretch 35 percent into a majority shareholding," Menon said, reiterating the fact that SingTel does not hold a majority stake in Telkomsel.

In addition, SingTel's lawyers said the KPPU's charges were filed through "unjust procedures", where SingTel was denied access to parts of the KPPU's files and was not a participant in the preliminary examination.

Menon added that SingTel was also not informed of allegations against the company, prior to the charges being filed.

The first hearing on the appeal is expected within the month of January 2008, said the lawyers, with the final decision scheduled to be made by end-February or "no later than March".

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