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.