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Company statements related to KPPU

DSNG’S STATEMENT ABOUT THE LATE SUBMISSION OF THE ACQUISITION REPORT ON RIMBA UTARA

Further to the Commission Decision pronounced by the Commission for the Supervision of Business Competition or Komisi Pengawas Persaingan Usaha (“KPPU”) on Case No. 20/KPPU-M/ 2020 dated 11 February 2021 regarding the late submission of report on the acquisition of PT Rimba Utara (“RU”)  by PT Dharma Satya Nusantara Tbk (“the Company”), the Company hereby conveys its exposition:

  1. The Company will honor and enforce compliance with the Commission Decision in accordance with prevailing regulations.
  2. The acquisition of RU was completed on 19 January 2012 for a transaction value of Rp 332 million and the Company acknowledged the late submission of the report to KPPU within the required timeframe.
  3. RU is a plantation company located in West Kalimantan with the Izin Usaha Perkebunan/IUP (Plantation Business License).
  4. In compliance with sustainability guidelines, the Company has decided not to develop RU into an oil palm plantation and consequently, the IUP of RU has been returned to the local licensing Authority since 2018.
  5. At the time of transaction, the Company had inadvertently misconstrued the KPPU’s requirements of report submission on completed acquisition transaction by assuming:
    • it was unnecessary for a transaction with value below the material threshold set by the prevailing regulation of the Capital Market Supervisory Agency (Bapepam)/Otoritas Jasa Keuangan (OJK);
    • the transaction of RU would not lead into any monopolistic practices or unfair business competition due to its immaterial value.
  6. At a later stage, after gaining a more proper understanding on the laws and regulations regarding the merger or consolidation of business entities and the acquisition of company, the Company took an initiative to submit its late report on the RU transaction to KPPU on November 26, 2019.
  7. In addition to the RU transaction, the Company also submitted the reports on other past acquisition transactions occurring in 2011, including PT Tanjung Kreasi Parquet Industry and PT Karya Prima Agro Sejahtera, whose transaction values were also below the material threshold set by OJK.  Both reports are currently being reviewed by KPPU.
  8. The initiative to submit those reports to KPPU indicates a goodwill gesture of the Company as well as a self-correcting action on the Company’s misinterpretation.
  9. The Company has timely submitted the reports to KPPU on all material transactions, such as the acquisition transactions of PT Bima Palma Nugraha and PT Bima Agri Sawit occurring in 2018.
  10. As a public listed company, the Company will always commit itself to complying with the prevailing rules and regulations and implementing good corporate governance.

Jakarta, 15 Februari 2021

PT Dharma Satya Nusantara Tbk