Bapepam urges Ades management to cooperate

Bapepam urges Ades management to cooperate

Rendi A. Witular, The Jakarta Post, Jakarta

The Capital Market Supervisory Agency (Bapepam) has urged the
newly installed management of beverage firm PT Ades Alfindo
Putrasetia to cooperate with the watchdog in uncovering alleged
misconduct by the previous management of the publicly listed
company.

Outgoing Bapepam chairman Herwidayatmo said the current Ades
management had not yet submitted any evidence regarding the
action of the company's previous management in overstating the
company's sales volumes for the past three years.

"The overstatements have been reported by the current Ades
management. However, they have not yet submitted any evidence to
us that would support the allegation," said Herwidayatmo on
Monday.

"Any indications that would serve to show a violation of the
Capital Market Law need to be followed up with an investigation.
We are still investigating whether what happened was intentional.
But we cannot process it until they give us the evidence," he
said.

In a recent filing with the U.S. Securities and Exchange
Commission, Coca-Cola Co. reported that Ades, its joint-venture
with food giant Nestle SA in Indonesia, had inflated its sales
volumes by two million to 13 million bottles every quarter since
the third quarter in 2001.

Herwidayatmo said that Bapepam had called in Ades' previous
auditor Dedy Saefudin to clarify the problem, with the auditor
claiming that the reports were based on actual figures and that
no violations had been committed.

"The company's previous auditor has clarified the problem, and
Bapepam has found no evidence of violations committed by the
auditor yet. Thus, Ades management will not have to explain to us
what caused the overstatements and how they occurred," said
Herwidayatmo.

In a report to the Jakarta Stock Exchange recently, Ades' new
management acknowledged possible downward adjustments to the
company's 2001, 2002 and 2003 financial reports.

The company said, for instance, that net sales for 2001, 2002,
and 2003 should have been adjusted downward by an estimated 10
percent, 30 percent and 32 percent respectively.

The Jakarta Stock Exchange (JSX) suspended trading in Ades
shares on Aug. 5 due to the overstatement issue and possible
insider trading following a sudden leap in the price of Ades
shares.

Trading in Ades shares is still suspended as the company's
management has refused to officially incorporate the estimated
downward adjustment figures into the 2001, 2002 and 2003
financial reports.

In its report to the JSX, Ades said the estimated downward
adjustment figures could not be used as guides for investors in
assessing the company's past financial accounts since the
documents needed to support the adjustments were no longer
available.

Meanwhile, the JSX insists that Ades must officially
incorporate the adjustments in order to create certainty for
investors and as supporting evidence so as to allow the bourse to
permit trading in the company's shares again.