PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued JUNE 30, 2005 AND 2006, AND FOR THE SIX MONTHS PERIOD ENDED
JUNE 30, 2005 AND 2006 Figures in tables are presented in millions of Rupiah, unless otherwise stated
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52. CONTINGENCIES
a. In the ordinary course of business, the Company has been named as a defendant in various legal
actions. Based on Managements estimate of the outcome of these matters, the Company accrued Rp99 million and Rp33,116 million as of June 30, 2005 and 2006, respectively.
b. On August 13, 2004, the Commissions for Business Competition Watch Komisi Pengawas Persaingan Usaha, “KPPU” issued its verdict in Commission Court, which determined that the
Company had breached several articles of Law No. 51999 on Anti Monopolistic Practices and Unfair Business Competition “Competition Law”. In addition, KPPU also indicated that the
Company should allow Warung Telkom “kiosks” to channel international calls to other international call operators, and abolish the clause in agreements between the Company and
Warung Telkom providers which limit Warung Telkom to sell telecommunication services of other operators. The Company filed an appeal to the Bandung District Court which on December
7, 2004, issued its verdicts in favor of the Company. On January 4, 2005, KPPU filed an appeal to the Indonesian Supreme Court. As of the date of issuance of these consolidated financial
statements, the Indonesian Supreme Court has not issued its verdicts. The Company does not believe that these proceedings presently pending will have a material adverse effect on the
Company’s consolidated financial position, results of operations or liquidity.
c. There are on-going investigations by the West Java Police Department as to the conduct of the
Company’s Director of Human Resources Development, the Company’s Director of Consumer, and several other employees of the Company including one former Director of the Company
and one former President Director of Napsindo – the Company’s subsidiary. As the details of investigations have not been made public, the Company does not know the full nature or extent
of the investigations or the matters to which they relate, or whether any charges are likely to be filed. Based on press reports, the Company understands that the investigations relate principally
to an alleged violation of anti-corruption law regarding i the retention by the Company of a consultant and an alleged overpayment without compliance with proper procedures; and ii the
alleged provision of interconnection services to Napsindo, the Company’s subsidiary, and Globalcom, a Malaysian company, at an incorrect tariff, and alleged use by NapsindoGlobalcom
of the Company’s network for the provision of illegal VoIP services. It is also understood that one of the investigations relates to the Company’s guarantee of a bank loan obtained by
Napsindo. To the Company’s knowledge, no charges have been filed against any of the persons investigated by the West Java Police Department, although several of them but not the
Company’s Director of Consumer were held in custody in West Java pending completion of the investigations. On May 10, 2006, those individuals were released from the police custody
because the police were unable to find any incriminating evidence to support the charges during the 120-day period they were held in police custody. 120 days is the maximum period allowed
for police custody of suspects for investigation purpose. At the date of issuance of the consolidated financial statements, the investigation is ongoing and there can be no assurance that
the police will not find evidence of wrong-doing, charges will not be filed in relation to the foregoing, or that such persons or other employees of the Company will not be found guilty of
any offence. Although the Company believes that the investigations are without merits, to the extent any of such persons are in custody, or are found guilty of any offence, the Company is and
would be deprived of their services. In addition, the Company does not believe that there are any financial ramifications as a result of the investigations.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued JUNE 30, 2005 AND 2006, AND FOR THE SIX MONTHS PERIOD ENDED
JUNE 30, 2005 AND 2006 Figures in tables are presented in millions of Rupiah, unless otherwise stated
- 119
53. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
