JSX lifts suspension of Ades shares
The Jakarta Post, Jakarta
The Jakarta Stock Exchange (JSX) resumed trading on Friday in the shares of beverage company PT Ades Alfindo Putrasetia after a three-month suspension following problems with its audited financial reports.
The bourse decided to lift the suspension after the company agreed to pay a fine of Rp 150 million (about US$16,400), and acknowledge the second warning letter sent by the bourse to the company on Tuesday.
The bourse decided to fine Ades as the company had made negligent statements in its audited financial reports regarding inconsistencies in its sales volumes, which resulted in a number of problems.
After the suspension was lifted, Ades shares leaped by 21 percent to a record high of Rp 3,650 in intraday trade, before falling back to close at Rp 2,925, down by Rp 75 from its opening price of Rp 3,000.
JSX trading director Sihol Siagian told The Jakarta Post that there had been no indications of price manipulation or insider trading in the dramatic rise in Ades shares during the first trading session, as the jump was primarily due to the value of the shares being brought up to date after they had been suspended for some time.
"The leap was obvious, and there was nothing wrong with that. The shares declined in price afterwards as investors were still concerned with problems with the company's financial reports," said Sihol.
The JSX suspended trading in Ades shares from July 26 until Aug. 2 after a dramatic rise in their value. The rise was partly the result of a report from Ades to the bourse that Swiss-based company Water Partners Bottling SA had bought a 65 percent stake in the beverage firm.
Water Partners is a joint venture company set up by Swiss- based Nestle SA and Refreshment Product Service Inc., a subsidiary of Coca-Cola Co., the world's largest beverage producer.
After Ades management clarified the report, the JSX lifted its suspension on Aug. 3. However, the bourse decided to halt trading of the shares again on Aug. 5 following unexplained movements in the Ades share price and discrepancies in its sales volumes.
The discrepancies were uncovered when Coca-Cola reported the case to the U.S. Securities and Exchange Commission, stating that Ades had inflated its sales volumes by two million to 13 million bottles every quarter since the third quarter of 2001.
In a report to the JSX, Ades' new management acknowledged possible downward adjustments to the company's 2001, 2002 and 2003 financial reports.
The company said, for instance, that net sales for 2001, 2002, and 2003 should have been adjusted downward by an estimated 10 percent, 30 percent and 32 percent respectively.