JSX still undecided over Telkom's delisting

JSX still undecided over Telkom's delisting

Rendi A. Witular, Jakarta

The Jakarta Stock Exchange (JSX) has yet to decide on whether
to delist telecommunications firm PT Telekomunikasi Indonesia
(Telkom) from the exchange, following the firm's inability to
submit an audited 2003 financial report by the required deadline.

JSX listing director Harry Wiguna told The Jakarta Post on
Friday that the bourse was still investigating why Telkom had
failed to submit its report on time.

Harry said that the JSX would also need time to consult with
the Capital Market Supervisory Agency (Bapepam), before deciding
on what to do with Telkom.

"We will decide Telkom's fate (on the exchange) before June 6.
All of the action taken by JSX should be approved by Bapepam.
This is a serious case because there's a possibility for the JSX
to violate its own regulation," said Harry.

Telkom, which also has its shares listed on the New York Stock
Exchange, failed to submit the reports on time after spending
over a year settling its 2002 financial report, which was
initially rejected by the U.S. Securities and Exchange Commission
as deficient.

Telkom settled the problem in February and is currently racing
to finish its 2003 report.

In a press statement on Friday, Telkom said that it was
unlikely to meet the June 6 deadline set by the JSX for
submitting its 2003 financial report, due to the limited time
available to finish its audit.

"It is expected that Telkom's consolidated 2003 audited
financial report will be submitted in the fourth week of June,"
said Telkom corporate secretary Adek Julianwar in the statement.

Telkom shares on the JSX ended higher by Rp 50 at Rp 7,400 on
Friday.

Harry said that the bourse would try to check whether the
delay in Telkom's audit report was caused by an irregularity
found in the audit, or whether it was merely caused by an
operational problem.

"We need some time to make a decision on the company because
Telkom is the largest counter on the bourse. We are still
calculating whether delisting them will bring a positive or
negative impact on overall trading at the JSX," he said.

Telkom has around 20 percent of the market capitalization on
the bourse.

Harry's explanation is contrary to his statement earlier this
month. Harry said at the time that "there will be no grace period
given to companies failing to meet the deadline in submitting the
2003 audited financial report, including Telkom".

The JSX issued a second warning letter to 35 firms a couple of
weeks ago for failing to submit their audited financial reports,
with a risk of being suspended or delisted from the bourse. The
JSX imposed a Rp 10 million (US$1,160) fine against the
companies.

The second warning letter came after the companies failed to
submit their financial reports by the April 30 deadline. The
bourse sent its first warning letter to the companies in early
April after they failed to submit their reports by March 31.

Harry said that of the 35 companies, only 20 had not yet
finished their reports, including state cement producer PT Semen
Gresik, tire maker PT Gajah Tunggal and companies under the
Texmaco Group and Sinar Mas Group.

Based on the JSX regulation, the latest letter gave the
companies an extension period of 30 days until June 6. The bourse
will then suspend trading of the companies' shares for two weeks
if they failed to submit their reports after this date.

If they again fail to comply within the two-week suspension
period, the JSX has no other choice but to delist them.