House questions JSX on Super Indah dealings

House questions JSX on Super Indah dealings

JAKARTA (JP): The House of Representatives' Commission VII
yesterday questioned the credibility of Jakarta Stock Exchange's
(JSX) management in handling PT Super Indah Makmur's unusual
share price movement.

"We have done something. We asked the company's management to
make a statement and we took action based on the statement,"
JSX's president, Cyrill Nurhadi, told the commission's members in
a hearing yesterday.

"It could happen and it happened that the price still went up
after we released the company's statement and we just could not
do more than that," Cyrill added.

Super Indah is a flexible plastic packaging company owned by
PT Ria Citra Corporation.

Controversy on Super Indah share trade emerged again early
this week when a company controlled by Johaness Kotjo, PT Van der
Horst Teguh Sakti, a subsidiary of Singapore's Van der Horst
Limited, announced it planned a tender to own up to 49 percent of
the company.

Early this month, there was a takeover rumor involving Kotjo.
The rumor boosted Super Indah share trade, causing a 78 percent
increase in prices to Rp 2,450 (US$1.04) in a day's trade on June
3. Around 8.7 million shares changed hands.

Following the sharp price increase, the JSX suspended trade of
Super Indah shares for the June 4 morning trading session. It
later lifted the suspension for the afternoon session. Only
thirty minutes after the JSX announced it would allow trading,
Super Indah's management released a statement saying the price
movement was out of their control.

Share prices rose after the suspension was lifted, a trend
which was considered unusual by some stock analysts.

In the period from June 3 to June 7, Super Indah was recorded
as the JSX's top gainer and having the second biggest turnover in
transaction value and volume.

Its share price closed 136 points higher that week than the
previous week's close. On June 7's close its price was Rp 3,250.
Around 30 million shares had changed hands with a transaction
value of Rp 90 billion.

"It doesn't make sense at all. If the rumor was wrong, the
share price should go down after the announcement. What happened
implied that the rumor would come true. But why didn't the
company confirm the rumor," a senior trader told The Jakarta
Post.

On Monday's close, the share price reached Rp 3,825 compared
to Rp 1,375 at June's opening.

"We have to believe the company's management," Cyrill argued.

Speaking to journalists after yesterday's hearing, Cyrill
defended the actions of the JSX.

He would not say if the JSX would take any action against the
company.

Tender offer

Van der Horst Teguh Sakti said in the announcement, which has
been confirmed by a JSX director, that it had signed a share
purchase agreement with PT Topas Investindo, which owns 12.25
million Super Indah shares, or 35 percent of its total shares.

Van der Horst therefore proposed to buy another 14 percent,
4.9 million shares, through a tender offer to own up to 49
percent of Super Indah.

Super Indah shares' highest price in the past 90 days will
determine the purchase price as stipulated by tender offer
regulations.

Commenting on the tender offer, Cyrill said, "I think the
company's management didn't know about the tender offer plan on
June 4, when we asked them to clarify the rumor."

He denied that the JSX had made a mistake in lifting the
suspension of Super Indah share trading.

He also denied speculation that the JSX had not received true
information from Super Indah's management.

"The tender offer plan happened in the previous few days and
not at the time we asked the company to clarify the rumor," he
contended.

Cyrill, however, agreed with the House members' suggestion
that the JSX should improve its supervision.

The JSX's decision to lift the Super Indah suspension came
only a few days after the Capital Market Supervisory Agency
(Bapepam) instructed the JSX management to improve its entire
supervision system following the Bank Mashill case.

Bapepam considered the JSX's poor surveillance was a key
factor which allowed several parties to trade Bank Mashill's
shares on inside information, because the JSX didn't suspend the
bank following a significant share price increase.

House member Markos Lubis urged the JSX management to enforce
capital market law and to maintain investor confidence by taking
proper action in any case such as Super Indah. (alo)