JSX halts trade in Lonsum shares over questions on dividend payment

The Jakarta Stock Exchange (JSX) halted on Tuesday trading in shares of plantation company PT PP London Sumatra (Lonsum) over allegations the company breached rules on dividend payments.

In a statement, the JSX said the bourse needed to suspend trading in Lonsum shares because there was a problem regarding the company's dividend payment plan, which it said was not in line with the existing regulation.

The regulation referred to by the JSX is a prohibition on companies with negative retained earnings paying a dividend.

Lonsum had accumulated losses from past years of about Rp 150 billion (US$16 million) in 2003.

Lonsum shareholders approved on June 23 a dividend payment of Rp 10 per share, or 3.3 percent of the companies 2003 net profit, which was Rp 311 billion. It was to be the company's first dividend payment since 1997.

Lonsum shares were last traded at Rp 925 before the JSX halted trading during the morning session.

It is uncertain when the JSX will allow trading of the shares to resume.

Lonsum has said it expects sales to surge by 15 percent to Rp 1.4 trillion this year, primarily due to an increase in sales of its crude palm oil, which this year is expected to reach 340,000 metric tons, up from Rp 267,000 metric tons last year. -- JP