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.