T. Ananda Krishnan, Malaysia’s second-richest man, and Indonesian tycoon James Riady faced off in a Singapore court today as eight of Krishnan’s companies sought an order to enforce a $300 million arbitration award.
Three of Riady’s companies said in their submissions for the hearing that they didn’t consent to the arbitration proceedings that awarded Krishnan part of the funds he had put into a failed pay-television venture in Indonesia.
Krishnan, worth about $7.8 billion according to data compiled and calculated by Bloomberg, and Riady, whose Lippo Group has media, financial services and property businesses in Asia, established the TV venture in 2005. They went on to do deals including in telecommunications. The hearing at the Singapore High Court beginning today and scheduled to end July 25 follows lawsuits in Indonesia, Malaysia and Hong Kong.
Krishnan’s Astro All Asia Networks Plc, which said in 2008 that it ended the venture after its Lippo partners failed to pay 805 million ringgit ($254 million) in bills, declined to comment on the dispute or reasons behind the breakdown in ties between the two companies.
Lippo has said Astro stopped providing satellite services to the pay-TV venture in October 2008 leaving “tens of thousands of Indonesian consumers stranded.”
Riady’s assistant Lina Megawati didn’t return two telephone calls or respond to an email seeking comment.
Lippo’s PT Ayunda Prima Mitra sued several companies and individuals linked to Astro in Indonesia in September 2008. Lippo claimed the lawsuit was in response to “threats by Astro to stop providing services” to the pay-TV operations, according to a regulatory filing in 2008. A month later, Astro started confidential arbitration proceedings in Singapore, a city-state which sits between Indonesia and Malaysia.
A three-member arbitration tribunal in 2010 ruled that Astro should get about $300 million from Lippo. To enforce the awards, Astro sought orders from courts including in Hong Kong, Malaysia and Singapore.
The arbitration was meant as a “trojan horse” for Astro to shoehorn three of its units into the dispute and resist the Indonesian lawsuits, Lippo’s lawyers said in their submissions to the Singapore court.
“The question is simply was there consent to arbitrate,” Lippo’s lawyer Toby Landau said in court today. There was never any agreement to arbitrate with three of the Astro units, Lippo’s lawyers said.
Astro’s lawyers are scheduled to argue their case tomorrow.
Following the pay-TV venture, Maxis Communications Bhd, controlled by Krishnan, in 2005 bought a controlling stake in Lippo’s PT Natrindo Telepon Selular for $100 million.
In 2007, weeks after Maxis bought the rest of Natrindo, Krishnan announced that Saudi Telecom Co. would buy a 25 percent stake in Maxis and 51 percent of Natrindo in an 11.4 billion riyals ($3 billion) deal.
Krishnan, a former oil trader who conceived the Petronas Towers development that transformed the skyline of Kuala Lumpur, has investments in healthcare, pay-TV and energy.
Lippo, which owns Indonesia’s biggest publicly traded developer, also owns stakes in a property trust in Singapore and has interests in media and healthcare. Riady paid $8.6 million in 2001 to the U.S. government for violating campaign laws by making contributions to Bill Clinton’s 1992 presidential election out of foreign corporate funds.
“I would have thought that a joint venture in satellite TV in Indonesia between the Astro group and Lippo would make a lot of money,” said Gerald Ambrose, who oversees 5.8 billion ringgit ($1.8 billion) in assets as managing director of Aberdeen Asset Management Sdn. in Kuala Lumpur. “To see it blow up like that was a real shame.”
The Singapore cases are Astro Nusantara International BV v PT Ayunda Prima Mitra OS807/2010 and OS913/2010. Singapore High Court.