Analysts question Kotjo's touch after VDH share plunge<\/p>\n
SINGAPORE (Reuter): Indonesian corporate player Johannes Kotjo
\nwas once known as the man with the Midas touch in the Singapore
\nstock market, but disappointing results for his key company have
\nanalysts raising questions.<\/p>\n
Infrastructure company Van der Horst (VDH), which Kotjo bought
\ninto in 1992, last week reported an unexpected 84 percent plunge
\nin interim profits to S$4.1 million (US$2.9 million).<\/p>\n
The VDH share price slumped to a 45-month low of S$1.98 after
\nthe results before recovering to end at S$2.61 on Friday.<\/p>\n
That price was a far cry from the high of S$8.85 at the
\nbeginning of 1994, when the company was chased by fund managers
\nwho saw it as a good proxy for infrastructure projects in
\nIndonesia, given Kotjo's connections.<\/p>\n
Kotjo was a top executive with Indonesia's Salim Group before
\nhis corporate forays in Singapore. He is also a close business
\nassociate of Bambang Trihatmodjo, President Soeharto's second
\nson, who has a stake in VDH.<\/p>\n
Company officials have blamed the recent drop in VDH mainly on
\nbanks which decided to dump 12.4 million shares held as
\ncollateral, just before and after the release of the results.<\/p>\n
Rumors of a poor set of results sent the VDH share price
\nspiraling downwards and some banks panicked and decided to dump
\nthe shares, Kotjo told analysts at a briefing after the results.<\/p>\n
VDH managing director Michael Oxborrow said Kotjo and his
\npartners didn't want the shares sold: "They didn't want to lose
\nthem in the first place. They would like to have them back."<\/p>\n
Kotjo, who was not immediately available for comment, held 19
\npercent of VDH before the sales. His stake is now down to 12.4
\npercent, said Kevin Lew, VDH financial controller. Bambang
\ncurrently holds 6.4 percent, compared with 9.3 percent before the
\nbank sales.<\/p>\n
Oxborrow said Kotjo had not been able to buy back VDH shares
\nin the open market because, under Stock Exchange of Singapore
\n(SES) rules, directors cannot deal in their company's shares up
\nto seven days after the release of their results.<\/p>\n
There is intense market speculation over whether Kotjo might
\nbuy back his shares on Tuesday when he is allowed to do so.<\/p>\n
"Kotjo said he liked his company and he liked his shares. But
\nhe did not say he would buy as that would obviously be breaking
\nSES rules and also the share price has run up," said an analyst
\nat a Singapore brokerage who attended Kotjo's briefing.<\/p>\n
Analysts said the bigger problem with VDH now was whether it
\ncould regain investors' confidence after its recent results.<\/p>\n
"We saw them in March and they said everything was on track.
\nThen they announce those shocking results. They had always
\ndelivered before but now you just have to be more cautious," said
\nan analyst who has been tracking VDH since Kotjo took over.<\/p>\n
When Kotjo bought into the company in 1992, it was a small
\nunprofitable engineering company. After turning around in 1993,
\ngroup profit jumped almost 10 times to S$32.18 million in 1994,
\nwhen the share price hit record highs.<\/p>\n
Profits continued to climb as VDH announced more contracts for
\npower and infrastructure projects in Indonesia and the
\nPhilippines, with earnings reaching S$51.89 million in 1996.<\/p>",
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