Bapepam to issue rules to help firms restructure

YOGYAKARTA (JP): The capital market watchdog, Bapepam, is to soon issue new rules on the revaluation of assets, mergers and acquisitions, and income tax on debt write-offs.

Bapepam chairman Jusuf Anwar said here on Saturday that the new rules were designed to help listed firms restructure themselves to avoid being delisted from the local stock exchanges.

"This is important because only healthy firms can give shareholders great added value," Jusuf said at a seminar on how to woo equity investors.

Jusuf, however, declined to mention when the agency would unveil the new rules.

Finance minister Bambang Subianto issued a new decree last month on asset revaluations, which allows companies to revalue their fixed assets annually rather than quinquennially as previously governed.

The ministerial decree is expected to enable troubled listed companies to boost their capital bases from asset revaluations to save them from being delisted from the local bourse.

According to the existing stock market regulations, listed firms which suffered losses in the last three consecutive years or which book financial losses on their balance sheets that amount to half or more of their paid-up capital at the end of the latest year will be delisted.

Jusuf said he would ask the JSX management and other supporting professionals to review their delisting rules.

He said companies that were troubled but with good prospects should be given a chance to restructure themselves so they could improve their performance, which eventually would help their stock prices recover.

Efforts to avoid delisting would benefit especially local investors, which currently account for 70 percent of stock trading on the JSX, compared to only 30 percent before the crisis began in July 1997.

JSX president Cyrill D. Noerhadi said his exchange was currently sounding out the possibility of merging with the Surabaya Stock Exchange (SSX), the only Indonesian bourse outside Jakarta.

"From informal meetings (between the management of the two bourses) which I did not attend, there is an indication that there will be a merger. But that is not yet formal, and it could change," Cyrill said.

Former SSX director Isakayoga suggested that the management of two exchanges ask expert opinion from a third party and learn from the experience of Malaysia, which originally had one bourse but now has three.

Jusuf promised that he would not intervene in the merger and would approve any decision taken by the two exchanges. (44)