Tugu, Pertamina summoned to explain dispute

The Commission VIII of the House of Representatives (DPR) has summoned the board of directors of state owned oil and gas company Pertamina and insurance company PT Tugu Pratama Indonesia as the dispute between the two companies continued.

Priyo Budi Santoso, a member of the House commission, confirmed on Tuesday that the two companies would hold a hearing with the commission on Wednesday (today) to explain their dispute with the House members.

"We will ask the two companies about their conflicts and the ownership of Bob Hasan in the insurance company," Priyo said as quoted by Bisnis Indonesia.

Pertamina, which controls the majority stake in the insurance company, has recently taken over the management of the company but the existing board of directors rejected the state oil and gas company's move.

Pertamina president Baihaki Hakim said that all of the members of the existing board of directors of the insurance companies had been replaced and were given two months to settle their "responsibility'.

Baihaki said that in a recent shareholders meeting, Pertamina accepted the accountability of the former management of the insurance company but the financial reports were rejected due to "strange" transactions taking place in the company's reinsurance contracts.

Pertamina as the majority shareholder has asked the management to sell the stake of Bob Hasan, a close friend of former president Soeharto, as part of efforts to root out corruption and collusion practices in the company.

PT Tugu Pratama is 45 percent owned by Pertamina, 20 percent by the foundation of Pertamina employees and another 35 percent by Nusamba, a company jointly owned by Bob Hasan and Soeharto's foundations. (*)