JSX halts trade in Lonsum shares over questions on dividend payment

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