Thu, 30 Mar 2000

Lippo e-Net 'gives misleading info'

JAKARTA (JP): Equity analysts accused listed life insurer PT Lippo e-Net on Wednesday of presenting misleading information to fool the public into believing it had transformed itself into an Internet company.

A number of equity analysts attending the company's public expose at the Jakarta Stock Exchange office on Wednesday said they were stunned to find out that thus far Lippo e-Net was a mere insurance company with practically no involvement in Internet investment or e-business.

"Lippo e-Net is spreading misleading information obviously only to stir their own share prices up," said Lin Che Wei of PT SG Securities Indonesia.

"Why do they already claim to be an Internet company, while saying they have not yet completed their business plan for the Internet business?" Lin queried.

Lin said Lippo e-Net's Internet business story was only a sensation to capitalize on investors' craze for the stock of high technology and Internet companies.

Lippo e-Net earlier announced it had changed its name to PT Asuransi Lippo e-Net from PT Asuransi Lippo Life as it had turned itself into an Internet and e-commerce company.

"Lippo e-Net since today has officially transformed itself into an Indonesian cyber business and e-commerce company worth Rp 2 trillion (US$266 million)," the company announced in late January.

Johanes Soetikno from the Indonesian Securities Investors Society (MISI) regretted what he called Lippo e-Net's irresponsible move to create such an image, while in fact it had not yet moved from insurance to Internet business.

"It is against the business code of ethics and the law that the company tried to convince the public that it was an Internet company, while actually it had not yet started any Internet investment or business," he said.

Law No. 8/1995 on Capital Market clearly prohibits any party from intentionally presenting untrue or misleading information to the public in a bid to artificially influence share prices on the stock market.

The law threatens violators with a maximum 10 years of imprisonment and a maximum Rp 15 billion fine.

Lippo e-Net president commissioner Billy Sindoro denied that the company had violated the law.

"Internet business is of the company's interest and we would invest in that to increase the value of stock held by investors," he said.

He said Lippo e-Net had about Rp 2 trillion in assets that can be gradually used for Internet investment.

The Rp 2 trillion assets include Rp 170 billion in cash, Rp 1.2 trillion in marketable securities and the remaining in equity participation in the non-listed affiliates.

"We are now still an insurance company with investments in the Internet business," he said.

He said the company would hold an extraordinary meeting in April to gain shareholders approval for the company's new name, the company's new statute, and its shift from insurance to Internet business.

Lippo e-Net, listed on the Jakarta Stock Exchange, currently manages less than 1 percent of the insurance premium funds placed by clients in the company as it has already transferred more than 99 percent of the funds to its affiliate, PT AIG Lippo, which is 30 percent owned by Lippo e-Net. (udi)