Double-probe into Ades starts

Rendi A. Witular, Jakarta

The Capital Market Supervisory Agency (Bapepam) is investigating beverage firm PT Ades Alfindo Putrasetia over an allegation that the company deceived investors by overstating its sales volume for the past three years.

Bapepam chairman Herwidayatmo said the agency had received reports from the new management of Ades regarding the allegation, and was investigating whether the incident was intentional.

"Any indications that may lead to violations of the Capital Market Law should be followed up with an investigation. That is what we are doing now with Ades," said Herwidayatmo after a ceremony at the Jakarta Stock Exchange (JSX) on Tuesday.

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

JSX president Erry Firmansyah said Ades had appointed auditor KPMG to reaudit the company's financial report.

"We are waiting for the audit result and an investigation by our division. We will see whether the company intentionally falsified information meant for public investors," he said.

Aside from the error in the company's reporting, a separate investigation has been launched into possible insider trading following a sudden leap in the price of Ades shares.

According to the JSX, Ades shares skyrocketed by 66.67 percent, or Rp 1,200, from Rp 1,800 on July 23 to Rp 3,000 on Wednesday.

The JSX suspended trading of Ades shares from July 26 until Aug. 2 after the shares leaped from Rp 1,100 to Rp 1,800 on July 23. The dramatic rise was partly the result of a report from Ades to the bourse that Swiss-based company Water Partners Bottling SA had bought a 65 percent stake in the beverage firm.

Water Partners is a joint venture company set up late last month by Swiss-based Nestle SA and Refreshment Product Service Inc., a subsidiary of Coca-Cola, the world's largest beverage company.

After Ades management clarified the report, the JSX lifted its suspension on Aug. 3. However, the bourse decided to halt trading of the shares again on Aug. 5 following unexplained movement of the shares.

The bourse remains suspicious that there are other substantial facts that have not been disclosed by the company.

Trading in Ades shares is still suspended.