JSX suspends trading of Gresik shares

JSX suspends trading of Gresik shares

Rendi A. Witular, Jakarta

The Jakarta Stock Exchange (JSX) suspended trading in shares
of state-controlled PT Semen Gresik (SG), the country's largest
integrated cement producer, after the firm's auditor issued
disclaimers for its 2002 and 2003 financial accounts.

JSX listing director Harry Wiguna said the suspension came
after SG auditor PricewaterhouseCoopers (PwC) refused to give an
opinion on the firm's financial accounts due to unaudited
financial figures from the company's subsidiary, PT Semen Padang.

"We have decided to suspend trading until shareholders receive
adequate clarification from SG regarding the audit problems,"
Harry said on Monday.

Gresik shares were last traded at Rp 8,000 before the JSX
halted trading during the morning session.

Harry said the shares would be suspended until SG's annual
shareholders meeting on June 30 or until SG received a
satisfactory opinion from PwC after completing the audit of Semen
Padang.

In SG's financial accounts, PwC said that "because we were not
able to express an opinion on the consolidated financial
statement of Semen Padang, the scope of our audit on SG was not
sufficient to enable us to express, and we do not express, an
opinion on SG consolidated financial statement for 2002 nor for
2003".

SG president director Satriyo said the current financial
accounts submitted to the JSX were still preliminary as it was
still waiting for the completion of the audit of Semen Padang,
which is expected to be completed in September or October.

"The disclaimer opinion is not because of a deficiency on our
part, but because of continuing delays in the completion of Semen
Padang's special audit," Satriyo said on Monday.

SG has been facing difficulties in finalizing its 2002
financial report, which in turn affected the completion of its
2003 report, due to problems with the rebellious West Sumatra-
based Semen Padang, which has demanded that it be separated from
the parent company.

Satriyo said that due to the delay, the government was
planning to change the composition of the company's current
management.

The government controls 51 percent of SG shares, 25.5 percent
is owned by Mexico cement giant Cemex SA and 23.5 percent by the
public.

The JSX has given until the end of this month for SG, along
with state-owned telecommunications firm PT Telkom, to submit
their audited 2003 financial reports or risk being suspended from
the index.

Listed companies were meant to submit their 2003 audited
financial reports to the JSX by March 31, but some firms failed
to meet this deadline for various reasons.

The JSX has issued several warnings to the companies that they
risk being suspended or delisted if they do not submit the
reports.

However, not all of the companies have been treated the same
by the JSX. Only SG and Telkom have received a dispensation to
submit their accounts by this month due to their large market
capitalization in the bourse.

Analysts have said the JSX's decision to extend the deadline
for SG and Telkom meant other companies would be free to commit
violations without fear of punishment.

Harry said the JSX had decided not to delist SG because it
would cause huge losses not only for the state but also
investors.

"Delisting SG is not an option right now. The public should
consider that delisting the company result in more losses than
benefits," Harry said.