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May 22, 2007 1:48 am

Djody presses Singapore over Telkomsel stake

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An Indonesian entrepreneur-cum-rock musician has launched a $1.6bn bid for the 35 per cent of Telkomsel, the country’s largest mobile phone provider, held by Singapore Telecommunications.

Setiawan Djody, chairman and chief executive of the privately owned Setdco Group, said on Monday that he had written to the Singapore government last month urging it to sell him the Telkomsel stake, part of which he once owned.

He said it would be in the island state’s best long-term interests to agree to his offer, which could intensify pressure over the issue of Singapore’s involvement in Indonesia’s mobile phone sector.

Temasek, the Singapore government’s investment arm, is SingTel’s largest shareholder. It also controls ST Telemedia, which owns a 42 per cent stake – the largest shareholding – in Indosat, Indonesia’s second biggest mobile phone operator.

Indonesia’s Business Supervisory Competition Authority is currently assessing whether to investigate Temasek for alleged monopolistic practices in the mobile phone sector.

Indonesian-Singapore relations were buoyed last month after the two countries signed an extradition treaty and defence co-operation agreement.

But they remain strained over Indonesia’s decision to ban sand exports to its neighbour.

Mr Djody claimed he would take legal action to acquire the shares if Singapore did not agree to his offer in the next few weeks, but would not specify the grounds of his potential action.

“The Singapore government does not want to be embarrassed and it is wise,” he told the Financial Times.

“They don’t want to go to court so I am confident they will agree to my offer.”

SingTel said the company was not in contact with Mr Djody.

“This is pure market speculation,” it said.

SingTel has invested S$1.93bn (US$1.27bn) in Telkomsel, making it the company’s second largest overseas investment after Optus of Australia. SingTel said it “remains committed” to Telkomsel and would like to increase its shareholding “if opportunities come along”.

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