Semen Padang causing problems for PT Semen Gresik<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
PT Semen Padang's failure to file an audited financial report
\nfor 2002 is causing problems for its holding company, publicly
\nlisted PT Semen Gresik, which as a result of the failure was
\nunable to issue a consolidated financial statement by the March
\n31 deadline set by the Jakarta Stock Exchange (JSX).<\/p>\n
Semen Gresik, which owns 99.99 percent of Semen Padang, must
\nnow pay Rp 1 million in fines for each day of the delay until
\nindependent auditors Hans Tuanakotta & Mustofa complete an audit
\nof Semen Padang in West Sumatra.<\/p>\n
Sources at Semen Gresik said they remained in the dark as to
\nwhen Semen Padang would be able to submit its audited financial
\nreport for 2002, but they acknowledged that the delay was causing
\nsevere damage to its corporate image.<\/p>\n
There has been conflicting information about why Semen Padang
\nhas not yet filed an audited financial statement.<\/p>\n
Semen Padang corporate secretary Desri Ayunda said the delay
\nwas caused by technical problems in the introduction of its new
\ndata processing system, Oracle.<\/p>\n
But sources at Semen Gresik in Surabaya alleged the problem
\nwas related to the failure of the Semen Padang management to
\naccount for Rp 50 billion (US$5.5 million) in spending in 2002.<\/p>\n
Ayunda insisted, however, that the company could not yet close
\nits books for 2002 simply because of start-up problems in the
\napplication of its Oracle data processing system.<\/p>\n
Despite the technical problems in the data processing system,
\nAyunda nevertheless disclosed to several newspapers in Padang and
\nJakarta as early as January that Semen Padang's performance had
\nimproved significantly last year, with a pretax profit of Rp
\n145.4 billion, up almost 184 percent from Rp 51.2 billion in
\n2001.<\/p>\n
Analysts in Jakarta who monitor cement stocks asked how Ayunda
\nwas able to disclose Semen Padang's financial performance as
\nearly as January, while the company still had not completed its
\n2002 audited financial report by the end of March.<\/p>\n
Sources at JSX said the management of Semen Gresik had been
\ncalled on to explain the delay.<\/p>\n
The shareholders of Semen Gresik, the country's largest cement
\nmanufacturer with a total capacity of 17.25 million metric tons,
\nhave tried, without success, since early last year to replace
\nSemen Padang's management over what they consider to be its
\ndismal performance.<\/p>\n
Semen Padang's 2001 annual report showed that the company,
\nwith an annual capacity of 5.5 million metric tons, was the worst
\nperforming of Semen Gresik's three cement units.<\/p>\n
The other two cement units are Semen Gresik, located near
\nSurabaya, which has an annual capacity of 8.2 million tons, and
\nSemen Tonasa in South Sulawesi, with an annual capacity of 3.48
\nmillion tons.<\/p>\n
Semen Padang directors have clung to their positions,
\nstaunchly opposing efforts to replace them through an
\nextraordinary shareholders meeting.<\/p>\n
The directors' defiance compelled Semen Gresik early last June
\nto ask for an injunction from the district court in Padang to
\nforce the Semen Padang management to convene an extraordinary
\nshareholders meeting.<\/p>\n
However, Roeslan Dahlan, chief of the court, rejected Semen
\nGresik's petition in mid-June, stating that there was no valid
\nreason to replace the management before its term ended in 2005.<\/p>\n
Semen Gresik, which is 51 percent owned by the state, 23.46
\npercent by the public and 25.54 percent by Cemex Asia Holdings
\nLtd. of Mexico, is now awaiting a ruling on the petition by the
\nSupreme Court.<\/p>",
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"sponsor": "Okusi Associates",
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