Newmont violates work contract

JAKARTA: Indonesia Investment Coordinating Board believes PT Newmont Nusa Tenggara have breached a work contract regarding 2.2% of voting rights owned by Batu Hijau mine owner.The board also is waiting for Ministry of Energy and Human Resources's recommendation
News Editor
News Editor - Bisnis.com 01 Juli 2011  |  04:47 WIB

JAKARTA: Indonesia Investment Coordinating Board believes PT Newmont Nusa Tenggara have breached a work contract regarding 2.2% of voting rights owned by Batu Hijau mine owner.The board also is waiting for Ministry of Energy and Human Resources's recommendation on the plan to purchase 7% of Newmont divestment share by the central government.Head of BKPM Gita Wirjawan claimed has read Newmont Mining Corporations letter to Security Exchange Commission. The letter stated that the gold miner manages 2.2% voting right.It is against work contract. The contract states that share ownership or voting right should not be returned to companies that conduct divestment; Newmont for this case.Such statement was pursuant to work contract, sealed on November 6, 1986, particularly Article 24 paragraph 3-12 on divestment regulation up to 31%, which should be conducted by Newmont and to purchase by Indonesian.The return of voting right to Newmont took place when PT Indonesia Masbaga Investama purchased PT Pukuafu Indah's shares on June 25, 2010, for US$72 million.The stock transfer was signed by Pukuafus President Director Rudolf Johannes Merukh, PT Indonesia Masbaga Investama (IMI) President Director Nusantara Suria Atmadja and Newmont Nusantara Tenggaras President Director Martiono Hadianto.Nevertheless, Pukuafu denied had disposed Newmont's shares to IMI. In an official statement, the Merukh's investment company insists Indonesia Masbaga to prove such transaction.Pukuafu assured that it never met anyone or agreed on any document related to the act of sale of 2.2% founder share.Not violating lawMartiono earlier revealed that Newmont involvement in giving loan to IMI was not a violation of Law on Limited Company, mainly article no 60.Gita made his point based on 2010 financial report published by Newmont Mining Corporation. The financial report mentions that Pukuafu handed over its ownership in Newmont Nusa Tenggara to IMI.The document also mentions the companies involved and the amount of the transaction. IMI settled the payment with the dividend it received. Moreover, IMI gave its voting rights and other responsibilities to Newmont. The action was an effort to reduce Pukuafu debts. The company belonging to Merukh family is reported to owe US$300 million to Newmont.The acquisition of 2.2% Newmont shares by Indonesia Masbaga from Pukuafu needs to be reevaluate. It is assumed to have connection with the return of voting rights to Newmont, Gita affirmed.Referring to the state administration, the change of share ownership from Pukuafu to IMI does not violate any law.As the institution managing investment, BKPM has given an approval of ownership change in Newmont Nusa Tenggara, including the ownership of Indonesia Masbaga in the letter No.691/A.8/2010 dated June 17, 1010.The letter was approved by Deputy of Investment Service Otman Rasyid. Moreover, the ownership change was registered in database of Ministry of Law and Human Rights on October 14, 2010.Separately, Finance Minister Agus D.W. Martowardojo asked for clarification on 2.2% shares belonging to IMI.The purpose is to ensure that the national ownership in Newmont Nusa Tengara is not diluted, it remains 51%. If the part [2.2%] does not belong to Indonesia, it must be corrected. In fact, the working contract states that 51% shares must belong to national companies, he explained.The ministry is waiting for initiative from Government of Nusa Tenggara Barat considering the offer of 1.75% shares, said Agus.If we have not been invited, PIP [state investment center] will invite the local government, including the Governor of NTB and the Regent [of Sumbawa], to visit Jakarta. They will hear our presentation on the offer, he said.Gita added that BKPM is waiting for a recommendation letter from the Ministry of Energy concerning divestment 7% of Newmont shares.The letter is expected to support BKPM decision in the continuation process of Newmont shares divestment. Once the letter is received, we will take actions. But it has not been received, Gita said. (T04/T05/NOM)

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