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)