Lippo e-Net clarification not enough: MISI executive

JAKARTA (JP): PT Asuransi Lippo e-Net's clarification published in Tuesday's newspapers was pointless and gave no answer to the market confusion about the insurance company, according to the Indonesian Securities Investors' Society (MISI).

"There is yet no clear consensus regarding Lippo e-Net," MISI executive Johanes Soetikno told reporters on Tuesday.

Lippo e-Net, as required by the capital market watchdog, published on Tuesday one full newspaper page clarifying inconsistent statements previously made by the company.

"Effectively, is it really an insurance company, an Internet company or just a holding company? Sorry, I cannot tell you," Johanes added.

The company announced in late January hat it had transformed itself into an Internet company, but Tuesday's clarification literally said the insurance company had not yet changed its core business which was currently an insurance business.

"Lippo e-net has not changed its business status. The company plans to hold a shareholders meeting in June, 2000 to approve the company's change of business," said Tuesday's clarification.

The company is still an insurance company and still directly manages the insurance premium proceeds, according to the clarification published in papers on Tuesday.

The listed insurance company said it had transferred over 99 percent of its premium proceeds to its non-listed affiliate, thus still managing less than one percent of the proceeds directly.

Johanes said Tuesday's clarification was just a means used by Lippo e-Net to look for justifications to erase its past sins by simply making modified, or even new, statements to the public.

Johanes said Lippo e-Net announced in early January it would immediately invest at least Rp 1 trillion in the Internet business.

But with the clarification the company modified the statement by stating that the disbursement of the Rp 1 trillion fund is gradual and conditional to the controlling circumstances and other developments which may arise over time.

As reported earlier, the Lippo e-Net share price doubled within a week following the company's Rp 1 trillion commitment announcement in January.

The share price in January surged from Rp 450 at the announcement to Rp 950 a week later in a very high transaction volume.

The peak price then went down consistently.

On Tuesday it was down by Rp 25 to close at Rp 300.

"Lippo e-Net has done damage to public investors by making misleading statements. The capital market watchdog should have imposed sanctions by now," Johanes said.

He said that a lot of public investors jumped on the bandwagon, being attracted by the increasing price of Lippo e-Net shares in January.

But the public investors were amazed and sold back their Lippo e-Net shares at a great loss upon learning that the company's Internet dream was actually premature, according to Johanes.

He said that requiring Lippo e-Net to announce another set of statements would mean granting the company a chance to excuse itself once again.

"Lippo e-Net was making vague statements that it could easily invite public misinterpretation. And such misinterpretation is always to the advantage of the company," he added.

Lippo e-Net in its Tuesday clarification stressed the company would be primarily an insurance business until the changes were approved at the next shareholders meeting in June.

The clarification also stated that Lippo e-Net would hand over its insurance business permit back to the government after it officially changed its business status, and then eventually transfer all the remaining insurance premium proceeds out of the company portfolio.

"The company also plans to drop the word 'Asuransi' in the future from its current official name -- PT Asuransi Lippo e- Net," the clarification said.

Lippo e-Net is listed on the Jakarta Stock Exchange. It changed its name in late January from PT Lippo Life to PT Asuransi Lippo e-Net. (udi)