Greg Earl, Jakarta – The beleaguered government of President B.J. Habibie appears to be extending its influence into the ownership of Indonesia's television stations in what may be a new attempt to revive its political fortunes.

According to Jakarta media sources Dr Habibie's brother, Mr Timmy Habibie, is involved in discussions of substantial stakes in two television stations which were previously controlled by business interests close to the former President, Mr Soeharto.

Indonesia's television networks have been providing increasingly provocative coverage of the recent political turmoil and are likely to play an influential role in the fortunes of political parties during next year's election.

There are also longstanding pressures from major international media companies to allow foreign investment in Indonesian private television to recapitalise the stations, which could make them a lucrative investment for anyone who can gain control now.

Bisnis Indonesia newspaper reported yesterday that the government-owned Bank Bumi Daya was set to take a majority stake in Surya Citra Televisi Indonesia, which is partly owned by Mr Soeharto's cousin. The newspaper quoted a statement from the producers of the station's leading news program as saying the takeover was to punish the station for its recent news reports on the student shootings.

But Jakarta media sources say that Mr Timmy Habibie's main holding company, Timsco, is negotiating over shares in SCTV, possibly through a foundation, which could obscure the ownership. The sources say that Timsco is also involved in a deal to take a stake of up to 40 per cent in the Indosiar television station, which was previously wholly owned by the Salim Group.

Salim is the holding company of Mr Soeharto's longstanding business associate, Mr Liem Sioe Liong, and has recently been forced to hand over shares in many of its subsidiaries to the Government to repay central bank liquidity credits to its Bank Central Asia.

SCTV is 52 per cent-owned by Mr Soeharto's cousin, Mr Sudwikatmono, and Mr Henry Pribadi, an associate of both Mr Liem and Mr Soeharto.

The other shares are owned by corporate vehicles controlled by Mr Peter Gontha, a longstanding media investor and partner of Mr Soeharto's son, Bambang. According to SCTV sources, an agreement had already been reached between SCTV and Bank Bumi Daya to reschedule debt under a government debt rescheduling, but the Government is now supporting a BBD takeover of the shares. A defender of the involvement of Timsco said yesterday that Dr Habibie did not want to have television stations closing under his administration and wanted to have them recapitalised. But the statement issued by the SCTV news program, Liputan Enam, said that the BBD takeover was punishment of the existing executives for their news judgement. Last week several groups protested outside the SCTV office both supporting and opposing its coverage of the demonstrations and student shootings.