JSX withdraws threat to PT Semen Cibinong

JAKARTA (JP): The Jakarta Stock Exchange (JSX) withdrew on Monday its threat to suspend cement producer PT Semen Cibinong from trading, after the company submitted explanations on the whereabouts of the missing US$250 million in deposits.

JSX president Mas Achmad Daniri said that with Semen Cibinong's written explanation, the exchange would not proceed with its plan to suspend the company.

"However, we're not completely satisfied with Semen Cibinong's explanations," Daniri told reporters in a press meeting.

JSX said last week that it would suspend Semen Cibinong if the company made no response within five days to the exchange's written inquiry on the whereabouts of the funds. The deadline ended Monday.

He said that Semen Cibinong's explanations still left several questions unanswered. According to him, the company still needed to clarify the source of the funds.

Furthermore, Semen Cibinong's claim that the money was kept in a deposit in two foreign banks also lacked verification.

Semen Cibinong, owned by business tycoon Hashim Djojohadikusumo, claimed to have deposited the $250 million at the Far East Bank in Cook Island and at the Bank of Central Pacific in Vanuatu.

But during a hearing with JSX earlier this month, the company was unable to disclose information on the existence of the two banks.

According to JSX, Cibinong offered to reveal documents of the banks' existence to JSX but not for public disclosure.

In its explanation to JSX, the company said it could not publicly disclose copies of the bank's deposit certificates as the company was currently in negotiations with its creditors.

Semen Cibinong has reported total debts of $1.4 billion, 94 percent of which is owed to foreign creditors.

In its letter, the company said that banks in Cook Islands, Vanuatu, Cayman Islands and Virgin Islands where widely known to be safe from attempts by creditors to freeze or take over debtors' funds.

Furthermore, Bank of Central Pacific and the Far East Bank offered good interest rates, it said.

However, Semen Cibinong admitted to have never had contact with the two banks before and that the company's board of directors and staff had never visited the banks.

Semen Cibinong said it was corresponding with the two banks when renewing its deposits. It further admitted that the two banks had financial difficulties.

Hashim said earlier that withdrawing the money from the banks was difficult, as the banks were experiencing problems in recouping loans channeled to several companies, including PT Tunas Mas, an affiliate of Cibinong under the Tirtamas Group.

Responding to the source of the missing $250 million, Semen Cibinong said it procured the funds in unsecured loans from several banks. But the letter did not specify the names of the banks.

The money, Semen Cibinong said, was used for working capital and general purposes.(bkm)