AEI backs Astra over withholding information

AEI backs Astra over withholding information

JAKARTA (JP): The Indonesian Public Companies Association
(AEI) has given moral support to the management of the country's
largest automaker PT Astra International in sticking to the
Indonesian capital market's rules on disclosure of information.

The association said on Tuesday that Astra International
showed legitimate reason in not providing inside and proprietary
information to a consortium of investors led by Newbridge Capital
and Gilbert Global Equity Capital.

"AEI views Astra as having taken the right steps," AEI
executive secretary Hidayat Muchtar said at his office.

He said the U.S. consortium could not demand such inside
information because it was only a potential investor, not a
shareholder.

Providing the information could lead to Astra's management
being sued by its shareholders, especially strategic partners
like Toyota Motors Corp. of Japan.

Newbridge Capital and Gilbert were chosen on Dec. 9 by the
Indonesian Bank Restructuring Agency (IBRA) as the preferred
bidder to acquire the agency's 40 percent stake in Astra.

The selection was made without an open tender.

Newbridge and Gilbert were granted the right to conduct due
diligence for the planned purchase of IBRA's Astra shares.

Problems arose when the Newbridge/Gilbert consortium requested
data from Astra, and Astra's management refused on the grounds it
was inside and proprietary information.

The U.S. investor group accused the management of attempting
to obstruct the deal by withholding crucial financial
information.

It has threatened to reconsider its planned share purchase if
the information is not disclosed.

Steven J. Gilbert, chairman of the Gilbert Global Equity
Capital said in a statement last week, "We are very concerned
that such actions may discourage them (foreign investors) from
investing in Indonesia, thereby impacting the economic recovery
plan of the government."

Astra vice president Aminuddin said on Thursday that the
investor group's request "goes far beyond the typical information
that would be provided in a public company takeover-type
situation, even in a developed market.

"We sincerely believe the Gilbert/Newbridge consortium is
going about its job unprofessionally, unnecessarily undermining
the investors' confidence in Indonesia, and has not shown its own
true interest of what it will do when it acquires the controlling
stake in Astra".

Aminuddin also accused the investor group of having no
intention to follow tender offer procedures under the Indonesian
Capital Market Law pertaining to acquiring a controlling stake in
a listed company.

"Astra is perturbed by this approach which undermines the
Indonesian government's credibility," he said.

Hidayat supported Aminuddin's argument and said that his
association believed the sale of the stake should proceed through
a tender process.

"Any shareholder -- be it the government, private
institutions, state-owned companies or individuals -- has to
comply with all the existing capital market regulations," AEI
said in the statement.

Meanwhile, IBRA chairman Glenn Yusuf said that despite the
dispute, his agency would not push for a change in Astra's
management.

"There will be no change in the company's management. One of
the reasons the investors want to enter Astra is because of its
management. So, they actually want to retain the management,"
Glenn said after speaking at a seminar on bank restructuring on
Tuesday.

Glenn also defended his agency's decision to appoint the
Newbridge/Gilbert consortium as the preferred bidder, arguing
that its bid of US$500 million was the highest.

"Even if there are some other bids, they do not come close to
$500 million. We need that large amount because we need to
contribute it to the state budget."

IBRA, under pressure to raise $2.4 billion by the end of this
budget year in March, signed a deal with Newbridge/Gilbert on
Dec. 9, under which a floor price for Astra's shares was set at
Rp 3,750.

Astra's share price ended at Rp 3,725 on Tuesday, unchanged
from Monday's close.

Glenn said IBRA would open the second round of bidding to
allow other investors to better the offer of Newbridge and
Gilbert.

"If there are other parties wanting to take over Astra and
which are capable like these investors (Newbridge and Gilbert),
please bid Rp 5,000 a share, for instance. They would be bound to
win."

Besides dominating the country's car and motorcycle market
which has begun a strong recovery, Astra International also is a
major player in agribusiness and financial services. (udi)