After several weeks of hearing, the Business Competition Supervisory Commission (KPPU) finally decided that PT Citra Prima Sejati, a subsidiary of PT Bumi Resources Tbk (BUMI), is guilty of delaying their notification of acquisition. Separately, the KPPU continue examining other companies allegedly of committing a similar violation. 

As we previously reported, the KPPU had revealed their plan to examine dozens of companies who did not submit their notification of acquisition on time as mandated by the law over two months ago and they began the trial several weeks ago. The corporations are considered negligent and suspected of having committed violations because they did not provide reports (notifications) after carrying out corporate actions in the form of mergers and acquisitions on time as mandated by the law. At the time, KPPU explained that the investigation process had been running for two to three months. Based on KPPU’s findings, the period of violation varies from 11 months to 5 years. The corporate actions suspected are as follows:

  • acquisition of PT Buana Minera Harvest by PT Citra Prima Sejati
  • acquisition of PT Mitra Bisnis Harvest by PT Citra Prima Sejati
  • acquisition of PT MBH Mining Resources by PT Citra Prima Sejati
  • acquisition of PT Citra Lautan Teduh by PT Wijaya Karya Beton Tbk (WTON), subsidiary of PT Wijaya Karya Tbk (WIKA) 
  • acquisition of PT Anugerah Abadi Multi Usaha by PT Ciliandry Anky Abadi
  • acquisition of PT Nusantara Infrastructure by PT MPTI
  • acquisition of PT Indo Putra Khatulistiwa by PT Matahari Pontianak Indah Mall
  • acquisition of PT Gerbang Sawit Indah by PT Pancasurya Agrindo
  • acquisition of PT Mitra Aneka Rizki by PT Pasifik Agro Sentosa
  • acquisition of PT Bintan Mineral Resources by PT Lumbung Capital (also a subsidiary of BUMI)
  • acquisition of PT MBH Minera Resources by PT Lumbung Capital
  • acquisition of PT Citra Jaya Nurcahya by PT Lumbung Capital 

The first Company facing trial was PT Citra Prima Sejati, a subsidiary of PT Bumi Resources Tbk (BUMI). So, per the Government Regulation (PP) No. 57/2010, merger notifications should be carried out within 30 working days. The KPPU must be notified of a merger/consolidation of a business entity or an acquisition of shares that result in asset value and or its sales value exceeding a certain amount (Rp2.5 trillion or the combined turnover value reaches Rp5 trillion).

In the first hearing on the acquisition of PT Mitra Bisnis Harvest by PT Citra Prima Sejati, the investigators mentioned that the transaction was worth Rp320.2 billion and that this acquisition was carried out to convert the debt owned by PT Mitra Bisnis Harvest. According to investigators, the takeover of shares was carried out on Nov. 23, 2013, that was over five years ago. Based on the notification of the amendment to the statutes of PT Mitra Bisnis Harvest in the deed No. 167 dated Nov. 28, 2013, received by the Ministry of Law and Human Rights on Dec. 24, 2013, then that date should be the effective time of the acquisition of the shares. Based on that date, PT Cipta Prima Sejati should have notified the corporate action to KPPU no later than Feb. 7, 2014. 

The next hearing held on the same day was to examine the takeover of PT Buana Minera Harvest’s shares, which were also conducted by PT Cipta Prima Sejati over five years ago.

Quoting from BUMI’s latest financial report, PT Cipta Prima Sejati is the Company’s subsidiary owned through Sitrade Coal, a special purpose entity. Through PT Cipta Prima Sejati, BUMI owned PT Bumi Resources Investment, PT Buana Minera Harvest, PT MBH Mining Resources, and PT Mitra Bisnis Harvest. In the same report, it was mentioned that PT Buana Minera Harvest, PT MBH Mining Resources, and PT Mitra Bisnis Harvest are under exploration or development stage. While PT Cipta Prima Sejati owned operating licenses in Ogan Komering Ulu and Banyuasin with the date of concession on Sept. 27, 2009, and May 9, 2011, respectively. 

What interesting from the list of companies targeted by the KPPU investigation is that PT Lumbung Capital is also BUMI’s subsidiary. Through the Company, BUMI owned PT Bumi Resources Minerals (BRMS), PT Bintan Mineral Resources, PT MBH Mineral Resources, and PT Citra Jaya Nurcahya. 

Long story short, the examinations and hearings continue without much attention from the media. On Oct. 1, 2019, the KPPU read their decision on two cases, namely:

  • Case No. 01/KPPU-M/2019 on the acquisition of PT Buana Minera Harvest by PT Citra Prima Sejati; and
  • Case No. 02/KPPU-M/2019 on the acquisition of PT Mitra Bisnis Harvest by PT Citra Prima Sejati.

In the first case, the KPPU declared that PT Citra Prima Sejati is guilty and therefore the Company had to pay a fine of Rp10.3 billion no later than 30 days after the decision is legally binding. This means, if the Company submits an objection to the decision through court proceedings, the Company is not required to pay a fine until there is a legally binding court verdict. However, during the trial process, KPPU stated that the Company was quite cooperative because they admitted that they had misinterpreted the provisions contained in Art. 29 of Law No. 5/1999 in conjunction with Art. 5 of the Government Regulation (PP) No. 57/2010. In addition, the Company has never been convicted before, nor has it benefited economically from the acquisition. As for the second case, KPPU has not yet made an announcement regarding the decision rendered. BUMI also have not published anything related to the process in KPPU.

On the same day, KPPU continued the trial of other cases, namely:

  • Case No. 03/KPPU-M/2019, on the acquisition of PT MBH Mining Resources by PT Citra Prima Sejati, which has entered the conclusion stage;
  • Case No. 04/KPPU-M/2019, on the acquisition of PT Citra Lautan Teduh by PT Wijaya Karya Beton Tbk, held to examine the expert witnesses;
  • Case No. 06/KPPU-M/2019, on the acquisition of PT Nusantara Infrastructure Tbk by PT Metro Pasific Tollways Indonesia, in the preliminary examination stage;
  • Case No. 09/KPPU-M/2019, on the acquisition of PT Mitra Aneka Rezki by PT Pasifik Agro Sentosa, which has reached the conclusion stage; and
  • Case No. 10/KPPU-M/2019, on the acquisition of PT Bintan Mineral Resource by PT Lumbung Capital, which is still in the preliminary examination stage.

The day after, on Oct. 2, 2019, the KPPU continue the trial of two other companies, including:

  • Case No. 05/KPPU-M/2019 on the acquisition of PT Anugerah Abadi Multi by PT Ciliandry Anky Abadi, which in the stage of expert examination and the hearings lasted for over 4 hours; and
  • Case No. 04/KPPU-M/2019, on the acquisition of PT Citra Lautan Teduh by PT Wijaya Karya Beton Tbk, held to examine the expert witnesses. The next hearing is scheduled to be held today (Oct. 3), and the plan is to submit the conclusion of the trial. This means we will hear the Council’s decision soon. 

 

By Pradnya Paramitha

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