JSX asked to refrain from delisting firms

JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam) has asked the local stock exchanges to be more tolerant of poorly performing companies.

Bapepam chairman Jusuf Anwar said that stock exchange operators should not delist ailing companies even though they no longer met requirements for listing.

Financial setbacks resulting from the country's worst ever economic crisis has left many companies short of the criteria required for stock market listing.

The 80 percent fall in the value of the rupiah against the U.S. dollar has caused foreign debts to increase by more than 300 percent when expressed in local currency terms and left many companies on the edge of a financial black hole.

Analysts estimate that more than half of the companies listed on the country's stock exchanges have been rendered technically bankrupt by the sharp increase in the rupiah value of their foreign debts.

"Exchange operators should be more lenient because poor performances are mostly due to the crisis and not a failure on the part of company managements," he said in a media briefing held to mark the 21st anniversary of the Indonesian capital market.

If Bapepam and exchange operators impose the requirements strictly then around 90 percent of firms currently listed on the local market would be delisted, an analyst who asked for anonymity said.

But according to the Jakarta Stock Exchange (JSX) president, only 43 companies no longer meet the listing requirements.

JSX president Cyrill Darwin Noerhadi added that 18 of these companies had explained the reasons for their financial problems and how they planned to set their affairs in order.

He said the exchange operators would soon meet with executives from the other 25 companies to hear their accounts of the financial difficulties currently besetting them.

But he hinted these companies would not be delisted from the exchange because their financial problems had mainly been caused by external factors rather than a failure on the part of their respective managements.

Jusuf Anwar also said yesterday that Bapepam was currently studying the possibility of introducing asset revaluation to help the country's cash-strapped companies get fresh funds to improve their capital bases.

"I would like to remind you that we are still in the process of studying this possibility" he said.

He said Bapepam had also simplified the procedure for listed companies to carry out a second share offering so that they would have no difficulties raising fresh funds through that route.

"God willing, under the new procedure listed companies will be able to organize a second share offering in only 42 days," he said, pointing out that under the old system at least 107 days were required to accomplish a similar feat.

"We are committed to boosting efficiency to improve our stock market," he said. (aly)