Hashim denies Semen Cibinong missing millions

JAKARTA (JP): Tycoon Hashim Djojohadikusumo denied on Tuesday a report that US$250 million disappeared from the books of publicly listed cementmaker PT Semen Cibinong.

The president of the country's third largest cementmaker said Semen Cibinong deposited the money in several overseas banks in 1997 and it remained in the institutions.

"The report that the funds are missing is untrue. I also deny slanderous reports saying that the fund has been used for money politics," he told a news conference.

"The fact is that the $250 million in funds is still recorded as deposits in the company's balance sheet until the end of June this year."

Hashim admitted that Semen Cibinong was experiencing difficulty in withdrawing the money because the banks also were having problems recouping loans channeled to several companies, including PT Tunas Mas, a Semen Cibinong affiliate under the Tirtamas Group.

Hashim said Tunas Mas received a $250 million loan from the banks to buy up to 50 percent of the shares in Bank Niaga from the Tahija family and the public in July 1997, shortly before the monetary crisis struck.

Hashim refused to name the banks where the funds were deposited because he feared the company's creditors would attempt to freeze or take over the funds.

"We have experienced similar cases," Hashim said.

Semen Cibinong was earlier said to have lost $250 million due to unspecified reasons, a report which discouraged its creditors from continuing debt restructuring talks.

The company has been engaged in debt-restructuring talks for 18 months with about 60 banks, including Deutsche Bank, Chase Manhattan, the U.S. Exim Bank and ABN Amro Bank.

Hashim said Semen Cibinong's total debt was $1.4 billion, 94 percent of which was owed to foreign creditors.

The report on the missing funds surfaced amid the Bank Bali scandal, leading some analysts to speculate the funds went missing in similar ways.

Bank Bali paid several politically well-connected people a commission of Rp 546 billion (almost $80 million at current exchange rates) for helping recoup its interbank loans held by the Indonesian Bank Restructuring Agency (IBRA).

The Jakarta Stock Exchange suspended the trading of Semen Cibinong's shares on Friday until the firm gave a clear explanation on the report of the missing funds.

Hashim said there were no irregularities in the fact that Semen Cibinong deposited its funds in banks which provided loans to Tunas Mas for the Bank Niaga share purchase.

"The availability of additional equity enabled the affiliates to invest in Bank Niaga, then one of Indonesia's strongest banks.

"However, the collapse of the Indonesian banking sector led to the loss of liquidity in Bank Niaga as well as other Indonesian banks and the loss of the investment by the (Tirtamas) group," Hashim said.

Hashim bought Tahija's shares in Bank Niaga for Rp 8,000 in 1997, but the value was only Rp 125 per share on Tuesday.

Hashim said Tirtamas undertook programs over the past two years to raise funds for the payment of Tunas Mas' debt, including through asset disposals and others measures.

The group has held off on selling its assets due to the low price offered by prospective buyers.

"The prevailing market situation has not permitted any transaction to close," Hashim said.

Hashim was optimistic that Tirtamas would reach a deal with a foreign investor by the first quarter of next year for the sale of a portion of its share in a petrochemical plant in Tuban, East Java. The plant is reportedly valued in billions of dollars.

"Proceeds from the asset disposal will be more than enough to pay off Tunas Mas' debt," Hashim said. (jsk)