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NEWS UPDATES 20 September 2009

Indonesian court rejects suit against Malaysian TV giant

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A Jakarta court rejected a $1.6 billion lawsuit filed by the Lippo Group's cable operator unit PT Ayunda Prima Mitra (APM) against Malaysia's largest cable television operator Astro All Asia Networks Plc, the Jakarta Post reported.

The South Jakarta District Court issued a ruling in favour of the Malaysian group, saying that APM did not have strong legal standing in the case, in which APM had accused the Malaysian company of applying improper accounting procedures in a joint venture deal between the two companies.

This ruling strengthened a previous Singapore arbitration court ruling which also favored Astro All Asia Networks Plc.

The Singapore International Arbitration Center issued a ruling in May, rejecting APM's challenge to the tribunal's jurisdiction and giving consideration to facilitate Astro in recovering 905 million ringgit ($260 million) from APM.

The arbitration court also prohibited APM from bringing any further legal proceedings against Astro in other courts.

The Jakarta Court rejected the arbitration ruling and decided to deal with developments since March under Indonesian legal jurisdiction. But in the end, the court's decision still favored Astro.

"We thank the court for such a fair ruling," Astro legal representative Todung Mulya Lubis said in a statement sent to The Jakarta Post.

The corporate secretary of PT First Media, APM's parent company, Harianda Noerlan said the company was considering seeking an appeal.

The case began last year when the two groups clashed over the question of paying $245 million in compensation to their joint venture cable operator, called Direct Vision (DV). Astro owns a 51 percent stake and 49 percent belonging to Lippo.

Astro accused APM of not contributing to the joint venture investment, while APM believed that the agreement signified that APM only dealt with obtaining business permits, while Astro was the one to provide investment funds.

The dispute continued when Astro decided to annul its investment in the joint venture, putting an end to its business, prompting a legal battle as a result. The Lippo Group is a major Indonesian conglomerate founded by Mochtar Riady.

The Group's one-time flagship, Bank Lippo, became the main pillar of the group's regional property expansion. The bank is now controlled by Malaysian CIMB Group, which then merged the bank with CIMB Niaga, removing Lippo's name entirely from the country's banking sector.


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