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Indonesia – Competition Highlights.

10 February, 2014

 

 

Proposed Acquisition Of PT. Perusahaan Gas Negara (“PGN”) By PT. Pertamina (“Persero”)

 

Following the Indonesian government’s approval for Persero’s proposed acquisition of PGN, the KPPU is closely monitoring the implementation of the deal. PGN is Indonesia’s largest natural gas transportation and distribution company while Persero is a state- owned oil and gas company, with its subsidiary, PT. Pertamina Gas (“Pertagas”), in charge of gas supply in Indonesia. While the purported aim of the merger is to ensure “open access” between the gas pipes infrastructure owned by PGN and Pertagas so as to strengthen national energy security, the merger will likely also reinforce PGN’s dominant position in the market for gas pipes infrastructure.

 

KPPU Commences Investigations Into Potential Irregularities in the PT. Dayamitra Telekomunikasi (“Mitratel”) Sale

 

The KPPU has announced that it has commenced investigations into certain practices of PT Telekomunikasi Indonesia, Tbk (“Telkom”), Indonesia’s largest telecommunications company. Specifically, the KPPU is reviewing the tender process of Telkom’s subsidiary in the telecommunications tower sector, Mitratel.

 

According to the Commissioner, Syarkawi Rauf, the KPPU believes that Mitratel had amended its tender process, but such amendments were not made known to the KPPU. Hence, the KPPU is interested in whether or not the amended process had an effect on the relevant market. This is primarily also because there is an obligation on Mitratel to comply with the relevant rules and regulations, and notify the relevant authorities of any material changes to its business processes.

 

The investigation by the KPPU into the tender processes of Mitratel is supported by Commission VI of the House of Representatives (“DPR”). Separate from the investigations, DPR stated that it had made an official request to the Ministry of State Enterprises to rescind the proposed sale of Mitratel, as the sale may potentially result in huge financial losses for Telkom. According to the DPR, the potential losses suffered by Telkom would have a detrimental effect on the country. In support of its request, the DPR further stated that the sale of Mitratel fell within the ambit of Law No 17 of 2003 Regarding State Monetary Affairs. Hence, any such sale must obtain the prior approval of DPR.

 

 

For further information, please contact:

 

Yogi Sudrajat Marsono, Partner, Assegaf Hamzah & Partners

yogi.marsono@aph.co.id
 
Eri Hertiawan, Partner, Assegaf Hamzah & Partners

eri.hertiawan@aph.co.id

 

Rikrik Rizkiyana, Partner, Assegaf Hamzah & Partners

rikrik.rizkiyana@aph.co.id

 

Vovo Iswanto, Partner, Assegaf Hamzah & Partners

vovo.iswanto@aph.co.id

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