9 June 2008: Singapore Technologies Telemedia has sold its entire stake in Indonesia's PT Indosat to Qatar Telecommunications for $1.8 billion.
The Singapore company’s 40.8% control of Indonesia’s second largest mobile phone operator came under scrutiny in an Indonesian court upheld allegations of anti competitive actions by Temasek Holdings, which holds shares in ST Telemedia as well as in Singtel. with holdings in another major mobile phone firm, Telkomsel. The sale comes just one month after an Indonesian district court on May 9 ordered either give up its stakes in one of the two telcos or reduce its stakes by half in both units within a year.
Temasek has always maintained that it does not control either Indosat or Telkomsel. The Indonesian government has control over the boards and prices set by the mobile phone operators. The original purchase moreover was made with the approval of all relevant authorities, including the Minister for Law and Human Rights, and the Indonesian People’s Representative Council (DPR), and Indosat’s shareholders (including the Indonesian government) at its EGM ST Telemedia bought into Indosat in 2002 during a bleak economic outlook and low investor confidence in Indonesia and when Indosat was faced with heavy debt and low credit rating. The move was seen as a demonstration of confidence in the Indonesian economy as the largest investment in Indonesia following the Asian financial crisis. ST Telemedia paid more than 50% premium over the then prevailing market price.
ST Telemedia said it would no longer have any involvement in Indosat, although Indonesia's supreme court was still to hear an appeal filed by Temasek, Asia Mobile Holdings and ST Telemedia against the antitrust ruling.