Thursday, December 01, 2005

Probo’s verdict put pressures on United Fiber

Following the Supreme Court verdict which sentenced businessman Probosutedjo four years in prison, Minister of Forestry MS Kaban declared that he won’t resume concession right of PT Hutan Rindang Buana (previously known as PT Menara Hutan Buana), an indirect subsidiary of Singapore-based United Fiber System Limited.

Kaban said the verdict had proved that Probosutedjo, former owner of PT Menara Hutan Buana, committed wrongdoing. “That means judges at State Administrative Court made wrong decision,” he said as quoted by on Thursday (Dec 1).

Probosutedjo filed lawsuit against Minister of Forestry for revoking PT MHB/HRB concession right of 268,585 hectares forest area in South Kalimantan, Indonesia. The then Minister of Forestry Mohammad Prakosa revoked the license in 2002 after Probosutedjo sold the concession right to Anrof Singapore Ltd which then acquired by United Fiber in 2002, without notice to the ministry.

Last year, the State Administrative High Court of Jakarta decided in favor of PT HRB and canceling the decree by the Minister of Forestry of the Republic of Indonesia purporting to revoke the Concession Right.

The Minister of Forestry then lodged a notice of appeal against such verdict to the State Administrative Supreme Court of Jakarta.

In October 28, 2005, UFS Chief Executive Officer Kishore Dass announced to Singapore Stock Exchange that the Supreme Court of the Republic of Indonesia has rejected the application by the former Minister of Forestry to uphold the decree issued by the Minister to revoke the Concession Right.

United Fiber controls 90% shares of HRB. Tektronix Industries Limited is the substantial shareholder of United Fiber with 48.2% shares. Indonesian-born businessman Wisanggeni Lauw owned 11.2% shares in United Fiber. Wisanggeni was reportedly a former staff of Probosutedjo and nephew of timber baron Prayogo Pangestu.

Singapore court in a hearing for Lauw versus Full Fledge disclosed that Lauw is an Indonesian national, was educated in an American university and had, after graduation, worked there for some ten years. He now has business interests in Indonesia, Singapore and China.

UFS is also involved in the competition to takeover pulp company PT Kiani Kertas assets from retired lieutenant general Prabowo Subianto.

In August, JP Morgan withdrew from a consortium formed with Indonesian investment firm Kingsclere Finance. The original consortium planned to acquire Kiani Kertas for 200 mln usd in cash and to assume 500 mln of its debts.

It would then have resold 80 pct of Kiani Kertas to Singapore-listed United Fiber Systems (Unifiber), in which Kingsclere's owner, Wisanggeni Lauw, is the biggest shareholder.




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