Prime News HOME > PRIME NEWS > STORY Feb 23, 2010 Astro wins $324m award against Lippo Malaysian firm wins dispute over failed pay-TV venture By Leslie Lopez, Senior Regional Correspondent The award is the latest twist in the crumbling alliance between Mr Ananda (above) and the Riady family which began in 2005 when both groups agreed to set up a joint venture to operate a pay-TV business in Indonesia. -- PHOTO: THE STAR/ ASIA NEWS NETWORK KUALA LUMPUR: Malaysian tycoon T. Ananda Krishnan's satellite television operator Astro has won a roughly US$230 million (S$324 million) award against the Lippo Group from the Singapore International Arbitration Centre (SIAC) over its failed joint-venture into a pay-TV business in Indonesia. The SIAC award, which was handed down last week, could have far-reaching implications on the Indonesia conglomerate which is controlled by the powerful Riady family. Lawyers and bankers familiar with the arbitration said the award allows Mr Ananda's publicly listed Astro All Asia Networks, which operates his satellite TV business, to file claims arising from the compensation from three Lippo-controlled entities including PT First Media Tbk, which is listed on Indonesia's Surabaya Stock Exchange. Astro announced the SIAC award to the Malaysian stock exchange yesterday, according to Bernama news agency. A senior Astro executive declined to discuss details of the SIAC award, which he said are confidential under the arbitration rules. Lippo executives were not immediately available for comment. The SIAC award is the latest twist in the crumbling alliance between Mr Ananda and the Riady family which began in 2005 when both groups agreed to set up a joint venture to operate a pay-TV business in Indonesia through PT Direct Vision (PTDV), which owned a multimedia licence awarded by the Indonesian government. The pay-TV tie-up led to other corporate ventures in a cellular operation in Indonesia and a property venture in Singapore with both groups acquiring Overseas Union Enterprise (OUE) from United Overseas Bank. While the Riadys no longer have any interest in the cellular business, the joint venture into OUE is riddled with problems between the two business groups over how to manage the property company, bankers and lawyers said. They said that the turmoil between Mr Ananda and the Riadys underscored the difficulties of forging inter-regional corporate alliances in South-east Asia. The Lippo group, which is headed by Mr Mochtar Riady and his son James, ranks as one of Indonesia's largest conglomerates with interests in finance, property and infrastructure. Mr Ananda, one of Malaysia's richest businessmen, presides over a multimedia empire, which over the past two decades has successfully melded telecommunications delivery systems and content. >From its broadcast centre just outside Kuala Lumpur, Measat satellites beam >programming for Astro to consumers in Malaysia, Brunei and Indonesia. The >satellite is also used by Maxis. Mr Ananda's corporate empire also features holdings in the regional power-generation sector, gaming, shipping and property such as the Maxis Tower, that line-up alongside the Petronas Twin Towers in Kuala Lumpur and the Four Seasons Hotel in Geneva. According to lawyers and bankers familiar with the latest arbitration award, Astro can stake claims for monies granted by the SIAC from PTDV, which is controlled by both PT First Media and another Lippo unit, PY Ayunda Prima Mitra. Several bankers closely tracking the fallout between Mr Ananda and his one-time Indonesian partners said that the Lippo Group would likely challenge the SIAC award in the Jakarta courts. But several corporate lawyers said that awards handed down by the SIAC are governed by what is commonly referred to as the New York Convention, which obliges countries to recognise and enforce arbitration awards made by other jurisdictions. Last year, SIAC handled disputes worth $1.5 billion in sectors such as construction and engineering, shipping and maritime, trade and insurance. It heard 160 cases last year, of which 114 involved foreign parties.
