MALAYSIA'S GUTHRIE STANDS BY INDONESIA PALM OIL DEAL

KUALA LUMPUR, June 26 (Reuters) - Malaysian plantation company KumpulanGuthrie Bhd is sticking to its plan to buy vast oil palm plantations inIndonesia despite lingering controversy over the deal, industry sourcessaid on Tuesday.Central government and officials in Riau province on Sumatra island,said last week they would form a team to help settle the sale of 25government-owned plantations to Guthrie in a deal worth around $345million, months after Jakarta said the issue was closed, Indonesiannewspapers reported."(Guthrie) knows they will face problems like in Riau. But the deal hasbeen closed. It's impossible for them to pull out even if they want to,"one source close to the firm said.Another source said: "Guthrie will stick to Jakarta's assurance thedeal has been closed."Guthrie officials confirmed the deal was closed, but declined to givefurther details.The sale of the oil palm plantations has been criticised by legislatorsand Riau officials, who said they would look at remaining social andeconomic controversies such as ownership of land and the participation oflocal residents in running the plantations.Officials in Jakarta have repeatedly said results from a separatereview by a central government team showed there was nothing wrong withthe deal and that it was final.Critics are concerned the deal would lead to foreign domination ofIndonesia's lucrative palm oil industry and trigger demands for landcompensation from local farmers.Shares of Kumpulan Guthrie fell five cents to end at 1.90 ringgit onTuesday.