JAKARTA: Indonesia's anti-trust agency, KPPU, has fined Singapore's Temasek Holdings 25 billion rupiah (US$2.8 million) or some S$4 million for breaching Indonesia's competition law.
The watchdog has also ordered Temasek to sell its stakes in either PT Indosat or PT Telkomsel – two major Indonesian mobile phone companies – within two years.
And potential buyers can only buy up to 5 percent of the shares and must not have any links to Temasek Holdings.
Eight other Singapore companies linked to Temasek have also been fined S$4 million.
The Singapore companies plan to appeal the decision in Indonesia's district court.
The five-member panel from Indonesia's anti-monopoly agency took more than three hours to read out its verdict on a case closely watched by foreign investors in the country.
The panel said Singapore investment firm Temasek Holdings and its subsidiaries were guilty of monopoly practices through their cross ownership of two of Indonesia's largest mobile phone companies – Telkomsel and Indosat.
Temasek owns 56 percent of SingTel, which has a 35 percent stake in Telkomsel.
And Singapore Technologies Telemedia, which Temasek fully owns, controls 75 percent of Asia Mobile Holdings (AMH).
AMH, in turn, owns 40 percent of Indosat.
Indonesia's competition law stipulates that a foreign company or business group cannot have more than a 50 percent share in an Indonesian business outfit.
Temasek has argued that it does not directly hold majority shares in each of the Indonesian mobile phone companies.
But the panel is maintaining that Temasek had violated cross-ownership regulations and, as a result, dominates 80 percent of the market.
According to the panel, Temasek and its units have control over appointments of key posts and have access to sensitive information from the two companies. Therefore, they are able to dictate the market.
Temasek has maintained that the Indonesian government actually holds majority stakes in Telkomsel and a golden share in Indosat.
But the panel rejected this notion, saying the government is not a business entity and its shareholding is in the national interest.
TemasekÂ’s lawyer said the decision has plunged Indonesia into a crisis of confidence in the country's legal system.
Lawyers from Temasek and ST Telemedia said the watchdog's decision is not final and they plan to file an appeal to the country's district court within two weeks.
- CNA/so
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