Singapore's Temasek probedIndonesia officials to investigate if the business competition law was violated
Friday, May 25, 2007
SINGAPORE'S state-linked investment firm Temasek Holdings is under investigation in Indonesia for alleged monopoly practices in the telecoms industry, an official said yesterday.
Indonesia's anti-monopoly watchdog Business Competition Supervisory Commission said it would start interviewing witnesses after concerns that the company was in breach of the nation's business competition law. The investigation centres on Temasek's alleged cross-ownership of two of Indonesia's largest mobile phone companies, Indosat and Telkomsel.
"We have started investigations and they are expected to take three months in maximum," said commissioner Syamsul Maarif .
"We will impose legal sanctions in the form of fines or a cease-operation if we find evidence on Temasek's monopoly practices," Maarif told AFP. Temasek officials were expected to be interviewed in coming weeks as part of the investigation, newspaper reports stated yesterday.
Temasek owns a 56 per cent stake in the SingTel Group, which has a 35 per cent holding in Indonesia's largest mobile telecoms firm Telkomsel, the Jakarta Post said.
Singapore Technologies Telemedia, wholly owned by Temasek, owns 41.9 per cent of Indonesia's second largest telecommunications company Indosat, it said.
The cross-ownership breached the 1999 Anti-monopoly Law, the newspaper said.
Commission chairman Muhammad Iqbal said it has already found "signs of a lack of competition between Telkomsel and Indosat" including similar prices for their mobile phone products.
This "indicates possible strategic control by their parent company", he told the newspaper. Meanwhile Temasek has denied any wrongdoing and said the company did not control the firms targetted in the investigation.
"Temasek denies strongly the monopoly allegation as Temasek itself doesn't operate its business in Indonesia. The case has been wrongly addressed," said the company's lawyer Todung Mulya Lubis when contacted in Jakarta.
He added that the commission has not yet contacted Temasek about the investigation.
The allegation that Temasek is orchestrating a monopoly was reported to the Commission by the State Enterprises Labour Union last Nov 17.
However, the union unexpectedly withdrew its complaint on April 2 and decided to launch a class action suit against Temasek.
Despite the withdrawal of the complaint, the Commission pressed ahead with its preliminary examination against Temasek.
Established in 1974 by the Singapore government, Temasek controls some of Asia's best-known companies including Singapore Airlines and Singapore Telecommunications. Its corporate portfolio is currently valued at $129 billion.
It has stepped up its investments in Asia's emerging economies in recent years, snapping up stakes in companies in the financial, telecoms and technology sectors. AFP
Indonesia's anti-monopoly watchdog Business Competition Supervisory Commission said it would start interviewing witnesses after concerns that the company was in breach of the nation's business competition law. The investigation centres on Temasek's alleged cross-ownership of two of Indonesia's largest mobile phone companies, Indosat and Telkomsel.
"We have started investigations and they are expected to take three months in maximum," said commissioner Syamsul Maarif .
"We will impose legal sanctions in the form of fines or a cease-operation if we find evidence on Temasek's monopoly practices," Maarif told AFP. Temasek officials were expected to be interviewed in coming weeks as part of the investigation, newspaper reports stated yesterday.
Temasek owns a 56 per cent stake in the SingTel Group, which has a 35 per cent holding in Indonesia's largest mobile telecoms firm Telkomsel, the Jakarta Post said.
Singapore Technologies Telemedia, wholly owned by Temasek, owns 41.9 per cent of Indonesia's second largest telecommunications company Indosat, it said.
The cross-ownership breached the 1999 Anti-monopoly Law, the newspaper said.
Commission chairman Muhammad Iqbal said it has already found "signs of a lack of competition between Telkomsel and Indosat" including similar prices for their mobile phone products.
This "indicates possible strategic control by their parent company", he told the newspaper. Meanwhile Temasek has denied any wrongdoing and said the company did not control the firms targetted in the investigation.
"Temasek denies strongly the monopoly allegation as Temasek itself doesn't operate its business in Indonesia. The case has been wrongly addressed," said the company's lawyer Todung Mulya Lubis when contacted in Jakarta.
He added that the commission has not yet contacted Temasek about the investigation.
The allegation that Temasek is orchestrating a monopoly was reported to the Commission by the State Enterprises Labour Union last Nov 17.
However, the union unexpectedly withdrew its complaint on April 2 and decided to launch a class action suit against Temasek.
Despite the withdrawal of the complaint, the Commission pressed ahead with its preliminary examination against Temasek.
Established in 1974 by the Singapore government, Temasek controls some of Asia's best-known companies including Singapore Airlines and Singapore Telecommunications. Its corporate portfolio is currently valued at $129 billion.
It has stepped up its investments in Asia's emerging economies in recent years, snapping up stakes in companies in the financial, telecoms and technology sectors. AFP
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