Astra meeting may become showdown<\/p>\n
JAKARTA (JP): Tuesday's extraordinary general meeting of PT
\nAstra International's shareholders is shaping up to be a showdown
\nbetween the Indonesian Bank Restructuring Agency (IBRA) and the
\nAstra management led by Rini Soewandi.<\/p>\n
IBRA, which claims to own 45 percent of the country's largest
\nautomobile company, will push ahead with its proposal to unseat
\nRini in a final bid to speed up the sale of its Astra stake
\nbefore the end of next month.<\/p>\n
But some analysts say the replacement of Astra management
\ncould speed up IBRA's sale of its Astra shares but at a lesser
\nprice as investors' interests might be dampened by the
\nappointment of a new management team with an unknown track
\nrecord.<\/p>\n
They said IBRA might find it hard to convince other
\nshareholders of the merits of a massive management shake-up at a
\ntime when the company is enjoying a robust recovery.<\/p>\n
At the meeting, the Rini Soewandi-led management will likely
\nflaunt its impressive performance record in leading the company
\nthrough a critical period in 1998 when the Astra share price
\nplunged to as low as Rp 225 under the weight of the economic
\ncrisis and political uncertainty.<\/p>\n
Astra shares are currently hovering at Rp 3,700.<\/p>\n
Astra, which reported a net profit (unaudited) of more than Rp
\n808 billion (US$109 million) last year, against a net loss of
\nover Rp 1.9 trillion in 1998, is also one of the few Indonesian
\ncompanies to succeed in gaining foreign creditors' trust for
\nrestructuring $1 billion in debts.<\/p>\n
But a change in management tops the meeting agenda as IBRA
\nblamed the failure of its previous deal with an American investor
\ngroup led by Newbridge Capital\/Gilbert Global on the
\nuncooperative attitude of Astra management.<\/p>\n
Goei Siauw Hong, Head of Research at securities company PT
\nNomura Indonesia, said IBRA would easily gain majority votes for
\nits proposal for a management shakeup because Rini, who became
\nAstra chief executive officer (president) in June, 1998, was
\npopular among creditors and bankers but not among Astra
\nshareholders.<\/p>\n
\"I think Rini is not working for the shareholders, and the
\nAstra management has not been as transparent as it often claims,\"
\nHong said.<\/p>\n
Hong cited the recent sale of Astra Securities and several
\nother questionable transactions with companies controlled or
\naffiliated with politically powerful businessman Mohamad Bob
\nHasan in 1997.<\/p>\n
\"We do not know until now what was the sale price of Astra
\nSecurities company,\" he added.<\/p>\n
Hong said Astra's management created suspicion when it
\nresisted the due diligence process that would have been executed
\nby Newbridge\/Gilbert as part of its deal with IBRA.<\/p>\n
Newbridge\/Gilbert did not have a problem with the
\nconfidentiality agreement demanded by Astra, except that it
\nunusually contained an \"indemnity clause\" which the investor
\ngroup could not accept, Hong added.<\/p>\n
\"The investor group was afraid Astra management would have
\nused a nominee to sue the investor consortium later on based on
\nthat indemnity clause,\" he said.<\/p>\n
But Hong also admitted that even if some irregularities were
\nfound in a due diligence investigation, they might involve just
\none or two hundred billions of rupiah which are relatively not
\nsignificant for a company of Astra's size.<\/p>\n
Another analyst, Arif Arryman from ECONIT research institute,
\nsaid it would be an enormous scandal if the rights of IBRA, as
\nthe holder of 45 percent stake in Astra, were not be honored at
\nthe Astra shareholders meeting on Tuesday.<\/p>\n
\"The sale of Astra shares is greatly important to support the
\nstate budget and to restore IBRA's credibility in wooing back
\nforeign investors to accelerate the country's economic recovery,\"
\nArryman said.<\/p>\n
In December, IBRA chose Newbridge\/Gilbert as the preferred
\nbidder for its Astra stake, but the American investor group
\nfailed to conclude a definitive agreement by the end of
\nthe exclusivity period on Jan.31.<\/p>\n
Newbridge\/Gilbert has blamed Astra management for obstructing
\na due diligence investigation, but Astra management flatly
\nrejected the allegation saying that it simply asked for a
\nconfidentiality agreement to protect Astra and the interests of
\nshareholders and to indemnify Astra directors against legal
\nconsequences for disclosing proprietary information.<\/p>\n
IBRA decided last week to terminate its controversial
\nagreement with Newbridge\/Gilbert and opened a competitive bid
\nthat offers a fair opportunity to all interested investors. (udi)<\/p>",
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