'Bapepam will not pursue Cibinong's missing deposit'

JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam) said on Friday it would leave it to the shareholders of publicly listed cement producer PT Semen Cibinong to decide whether Bapepam should continue investigating the company's "missing" deposit worth US$250 million.

Bapepam chairman Herwidayatmo said his office had no plans to further investigate Semen Cibinong, after the company announced it would seek shareholders' approval to write off the deposits.

"This is not our concern, it's up to the shareholders whether they accept it (Semen Cibinong's write-off plan) or not," he told The Jakarta Post.

The issue surrounding Semen Cibinong's "missing" deposit surfaced in 1999, when it led to the company's financial report containing a disclaimer opinion.

Semen Cibinong was reported to have lost $250 million due to unspecific reasons. The company, owned by business tycoon Hashim Djojohadikusumo, claimed to have deposited $250 million at the Far East Bank in Cook Island, and the Bank of Central Pacific in Vanuatu.

But financial difficulties at these banks made it difficult to collect the deposits, it said.

Speculation that the funds had gone missing followed after Semen Cibinong was unable to prove the existence of the deposits.

Last year, Bapepam penalized Semen Cibinong with a Rp 1 billion (about US$ 87,000) fine over the latter's failure to prove the deposits' existence.

Herwidayatmo said that after imposing the fine, his office saw no further need to pursue the whereabouts of the missing US$250 million.

But he added he would demand accountability from Semen Cibinong if its shareholders rejected the write-off proposal.

Semen Cibinong has said that publicly disclosing copies of the banks' deposit certificates could encourage creditors, with which it had been in negotiation, to freeze the deposits.

The company argued that banks in Cook Island, Vanuatu, Cayman Islands, and Virgin Islands where widely known to be safe from attempts by creditors to freeze or take over debtors' funds.

Semen Cibinong said the $250 million in deposits were funds it procured in unsecured loans from several banks.

Separately, analyst Goei Siouw Hong at securities firm PT Nomura Indonesia, urged Bapepam to pick up the inquiry over the missing deposits.

"This is a matter of accountability ... of showing good corporate governance," Hong said.

Semen Cibinong's corporate secretary Jannus Hutapea declined to comment on the issue other than what had already been stated in the company's public announcement on Wednesday.

In that announcement, which appeared in the daily Harian Ekonomi Neraca, Semen Cibinong said the write off plan was part of its debt restructuring deal.

The company explained that Swiss-based cement group Holcim Ltd, formerly known as Holderbank Financiere Glaris Ltd, has agreed to help restructure Semen Cibinong's debts.

Holcim requires Semen Cibinong to first clear the issue over the missing deposits. It also suggested that Semen Cibinong write off the deposits.

Under the debt restructuring deal, Holcim would raise its stake from the present 12.5 percent to 74.5 percent.

Previously, Semen Cibinong had been considering taking legal action against the two banks, however its lawyer advised the company not to do so.

Semen Cibinong's legal advisor Hotman Paris Hutapea warned that a legal battle against the two banks would be too costly in terms of time and money with the chances of winning being considered slim.

On June 26, Semen Cibinong plans to hold an extraordinary shareholders meeting to seek approval for the write-off and debt restructuring proposals.(bkm)