Britain’s Churchill Mining is a company legally incorporated in the United Kingdom and listed on the London Stock Exchange Alternative Investment Market (AIM). Churchill’s investment in Indonesia is carried out through PT Indonesia Coal Development (ICD), the shares of which are owned by Churchill Mining, Plc (95%) and Planet Mining, Plc (5%).
East Kutai Regency Head Isran Noor explains, “Based on data of the Indonesian Investment Coordinating Board (BKPM) and the Ministry of Justice and Human Rights of the Republic of Indonesia, on November 23, 2005, ICD was established as a Foreign Investment Company (PMA) with authorized capital and paid-up capital of US$250,000, with the intention and purpose of engaging in Mining Services and Geology, which fall under Category 10101 KBLI – Standard Industrial Classification of Indonesia, and is not a Coal Mining Company, which falls under Category 0510 KBLI. It is clear that their operation as a Coal Mining Company is illegal.”
Based on data from the Ministry of Justice and Human Rights Affairs of the Republic of Indonesia, 4 companies, referred to as Ridlatama Group, are namely:
a. PT. Ridlatama Tambang Mineral, established on August 31, 2005
b. PT. Ridlatama Trade Powerindo, established on December 14, 2006
c. PT. Investama Resources, established on September 5, 2007, and
d. PT. Investmine usa Persada, established on Septermber 5, 2007
Ridlatama Group and Churchill entered into a cooperation as elaborated in the Investment Agreement in 2007. The cooperation was made by PT. Indonesia Coal Development, PT. Techno Coal Utama Prima, PT. Ridlatama Steel, PT. Ridlatama Power, PT. Ridlatama Mineral Mine, PT. Trade Ridlatama Powerindo, Ani Setiawan, and Florita. Under the Investment Agreement, Churchill will have the rights and interests over Ridlatama Group and in accordance with the Indonesia law, Churchill is allowed through ICD to own and control 75% (seventy five percent) shares in Ridlatama Group, and this has to be immediately executed by shareholders of Ridlatama Group.
This suggests that Churchill HAD KNOWN with certainty that Churchill and ICD CAN NOT have a stake in Ridlatama Group under the provisions of the applicable law in Indonesia.
To make it clearer, the content of the Article 3.2 Investment Agreement is cited as follows: “As for the 75% of the shares of TCUP (PT. Techno Coal Utama Prima), if there is a change in the laws of the Republic of Indonesia which allows ICD to hold shareholding in the KP Holders, all of the KP Holders shall provide all necessary assistance, including without limitation, executing any documents required to ensure that such shares are transferred to ICD.”
If the Investment Agreement 2007 was legitimate and complied with the provisions of the laws, quod non, Churchill had annuled the Investment Agreement in 2007 following the signing of the Cancellation and Waiver Agreement dated January 27, 2011, aiming at annuling the Investment Agreement 2007.
Similar agreement with the Investment Agreement 2007 also took place on March 31, 2008 between PT. Indonesia Coal Development, PT. Techno Coal Development, PT. Techno Coal Utama Prima, PT. Investmine Nusa Persada, PT. Investama Resources, Ani Setiawan, and Florita. The provisions were the same with the Investment Agreement 2007.
“Based on the detailed explanation we can understand that Churchill Mining has fully understood with certainty that Churchill and ICD can not have a stake in Ridlatama Group under the provisions of the applicable laws in Indonesia,” said Isran.
The Alleged Forgery Of Documents
Isran explains that “The Supreme Audit Agency of the Republic of Indonesia (BPK) in the Report of Examination states there are indications of Forgery over 5 Regency Decrees with Regard to Coal Mining Permits.”
The Supreme Audit Agency of the Republic of Indonesia (BPK) in the Report of Examination or Examination of Specific Purpose Semester II, Year 2008 over Coal Mining Management for Fiscal Year 2006 and 2007 of the East Kutai Regency Government and the holder of Mining Authority in Sangatta, No. 20/LHP/XVII/02/2009, dated February 23, 2009, states that: There are indications of Forgery of 5 (five) Regency Decrees Related with Coal Mining Permits.
Further analysis by a team over five Regency Decrees issued PT. Ridlatama business group indicates the presence of some irregularities as follows:
The numbers format of the 5 decrees (SK) is different with numbers format of the decrees (SK) used by the Regeny Head in 2008. The decrees’ numbering of five (5) SKs was placed in front, for example: 36/02.188.45/IV/2008 while the valid format applied in 2008 was placed in the middle, for example 02.188.45/36/HK/IV/2008.
“Checking into the Registry Book of the existing decree of the Regency on East Kutai Regency, ‘Hijum’ Section, showed that all the numbers of the five decrees were not intended for mining licenses but for other things,” said Isran.
Further studies of the Registry Book of the Regent’s Decrees on April 9, 2008 showed that the decrees issued on that date also were not intended for mining licenses to the five KPs of the PT. Ridlatama business group, but for other things.
The results of checking into the Planning Office indicate that the East Kutai Regency Area Map which was attached in those decrees also did not use the proper map format issued by the Planning Office of the East Kutai Regency.
There are indications of falsification in that the signatures of the five East Kutai Regent Decrees are really identical. It is almost impossible that a person can have identical signatures on some documents.
Isran said that Churchill never notified the local government about its interest in Ridlatama. “I have written letters twice to Churchill, requesting a clarification over its interest in Ridlatama, but got no response. It was only after the dispute turned noisy that they started to make claims,” he added.
Isran said, “Churchill published false information on the size of the estimated reserves in the concession area in order to boost its share price. I think the Alternative Investment Market of the London Stock Exchange should know about this very important issue. This is illegal operation.”
– Statement issued by PowerPR Asia Pacific for the Government of Indonesia, East Kutai local government.
Vanya Manuputty – +62-813-80444507
Mexson Sitompul – +62-812-8107200
PowerPR Asia Pacific
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