Analysts question Kotjo's touch after VDH share plunge

Analysts question Kotjo's touch after VDH share plunge

SINGAPORE (Reuter): Indonesian corporate player Johannes Kotjo
was once known as the man with the Midas touch in the Singapore
stock market, but disappointing results for his key company have
analysts raising questions.

Infrastructure company Van der Horst (VDH), which Kotjo bought
into in 1992, last week reported an unexpected 84 percent plunge
in interim profits to S$4.1 million (US$2.9 million).

The VDH share price slumped to a 45-month low of S$1.98 after
the results before recovering to end at S$2.61 on Friday.

That price was a far cry from the high of S$8.85 at the
beginning of 1994, when the company was chased by fund managers
who saw it as a good proxy for infrastructure projects in
Indonesia, given Kotjo's connections.

Kotjo was a top executive with Indonesia's Salim Group before
his corporate forays in Singapore. He is also a close business
associate of Bambang Trihatmodjo, President Soeharto's second
son, who has a stake in VDH.

Company officials have blamed the recent drop in VDH mainly on
banks which decided to dump 12.4 million shares held as
collateral, just before and after the release of the results.

Rumors of a poor set of results sent the VDH share price
spiraling downwards and some banks panicked and decided to dump
the shares, Kotjo told analysts at a briefing after the results.

VDH managing director Michael Oxborrow said Kotjo and his
partners didn't want the shares sold: "They didn't want to lose
them in the first place. They would like to have them back."

Kotjo, who was not immediately available for comment, held 19
percent of VDH before the sales. His stake is now down to 12.4
percent, said Kevin Lew, VDH financial controller. Bambang
currently holds 6.4 percent, compared with 9.3 percent before the
bank sales.

Oxborrow said Kotjo had not been able to buy back VDH shares
in the open market because, under Stock Exchange of Singapore
(SES) rules, directors cannot deal in their company's shares up
to seven days after the release of their results.

There is intense market speculation over whether Kotjo might
buy back his shares on Tuesday when he is allowed to do so.

"Kotjo said he liked his company and he liked his shares. But
he did not say he would buy as that would obviously be breaking
SES rules and also the share price has run up," said an analyst
at a Singapore brokerage who attended Kotjo's briefing.

Analysts said the bigger problem with VDH now was whether it
could regain investors' confidence after its recent results.

"We saw them in March and they said everything was on track.
Then they announce those shocking results. They had always
delivered before but now you just have to be more cautious," said
an analyst who has been tracking VDH since Kotjo took over.

When Kotjo bought into the company in 1992, it was a small
unprofitable engineering company. After turning around in 1993,
group profit jumped almost 10 times to S$32.18 million in 1994,
when the share price hit record highs.

Profits continued to climb as VDH announced more contracts for
power and infrastructure projects in Indonesia and the
Philippines, with earnings reaching S$51.89 million in 1996.