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Malaysia’s Astro demands compensation from Indonesian firm


October 8, 2008

Malaysia’s Astro demands compensation from Indonesian firm

Malaysian-based Astro All Asia Network broadcasting company has filed a case against Indonesia's Lippo Group conglomerate in an arbitration court, demanding 2.46 trillion rupiah ($258.3 million) in compensation, reported the Jakarta Post.

In a statement sent to the Indonesian daily Tuesday, Astro says that the arbitration was filed at Singapore International Arbitration Center, and that the compensation was for support and services Astro had provided to Lippo's subsidiary PT Direct Vision in a joint pay-TV operation in Indonesia.

"Despite various attempts, the parties failed to complete the joint venture," the statement says.

Last month, Astro decided to not to renew its contract with Direct Vision which is 49-percent owned by the Lippo Group unit after allegations that the latter had failed to pay a $245 million bill. As of August 31, the day the contract was set to end, Astro ceased all broadcasts in Indonesia.

Previously, Direct Vision had a 30-day grace period to make alternative arrangements and mitigate the impacts of its closure on its 100,000 subscribers, but Astro subsequently agreed to extend the grace period indefinitely.

According to recent Malaysian media reports, the break up of Astro's joint venture is the latest in a series of business rows between Lippo Group (with James Riady at the helm) and the Malaysian business group controlled by the high-profile tycoon Ananda Krishnan.

The two conglomerates were previously engaged in a property business in Singapore and a mobile telecommunications business in Indonesia.

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