Listed firms told to reveal failures in revenue targets

JAKARTA (JP): Chairman of the Capital Market Supervisory Agency (Bapepam) Bacelius Ruru has urged newly-listed companies to publicly disclose their failures to achieve earning projections.

"Disclosing failures to achieve earning projections is a must for newly-listed firms so that the investing public will understand what is happening in their business activities," Ruru told The Jakarta Post.

The chairman of the capital market watchdog, however, ruled out the possibility of issuing disciplinary measures, saying that the failure to achieve earning projections was often unavoidable due to unfavorable business conditions.

Bapepam, beginning early last year, requires new share issuers to state projections of their sales and earnings for the first year of their listings on their prospectus, an informational document stating the intent to issue securities required by Bapepam.

Capital market analysts, however, said that only some of newly listed companies abide by the ruling despite the fact that many of them have failed to perform as expected.

Andreas Lauw of the Indonesia Business Data Center said the announcement of failures to achieve targets was limited to certain parties.

"PT Aneka Kimia Raya was the only newly-listed firm which announced the revision of its financial projection to the press," he said.

Penalty

He said that it is important for Bapepam to consider the use of a penalty to punish those newly-listed companies that cannot keep the promises in their prospectus.

Other analysts said that a penalty is essential to protect the investing public from being cheated by securities issuers, who are often charged with manipulating their financial reports to attract investors.

According to the data of the center, only 22 of 41 companies listed on the Jakarta Stock Exchange (JSX) last year were able to achieve the projections of their earnings for 1994.

The 1994 sales of PT Sumalindo Lestari, for example, were only 71.18 percent of its projection, while its profit was only 36.88 percent of the target due to the fall in plywood prices on overseas markets.

Other new listings, which failed to meet their initial profit targets for 1994, include Ometraco Realty, Jaya Real Property, Suparma, Panca Wiratama, Jeewon Jaya, Putra Surya Perkasa, Karell Indonesia, Steady Safe, Intinusa Selareksa, Enseval, Asiana IMI, Perdana Cipta Multi Finance, Indofood, Pudjiadi Prestige, Bank Mashill, Centris Multipersada, Ades Alfindo, Super Indah Makmur and Ugahari.

The best performers of the new listings include Wicaksana Overseas, Bank Rama and Langgeng Makmur. Profits of the three were around 12 percent above their initial projections. (hen)