Miwon's underwriter fails to meet obligation
Miwon's underwriter fails to meet obligation
JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam) has ordered PT Sun Hung Kai Securities Indonesia to fulfill its obligation in underwriting PT Miwon Indonesia's initial share offering.
Bapepam's chairman, I Putu Gede Ary Sutha, said on Tuesday evening that he summoned the directors of Sun Hung Kai to explain the case. None of them showed up.
"Instead, the company's chief commissioner came to us. I told him that the company had to meet its commitment as stipulated in the prospectus," Putu said.
Sun Hung Kai acted as lead underwriter for Miwon's public offering last month. It underwrote 21.55 million shares of Miwon's 25 million offered shares.
Miwon shares, with a face value of Rp 500 (22 U.S. cents) each, were sold at an initial price of Rp 1,950 each. The price fell to Rp 1,450 on the listing day, Oct. 31, and only six million shares of the total 25 million offered shares were sold during the initial public offering.
Putu said Bapepam identified that Sun Hung Kai, as Miwon's lead underwriter, had failed to absorb the rest of the unsold shares.
"Sun Hung Kai agreed to underwrite Miwon on a full-commitment principle. Therefore, it must pay up on the unsold shares," Putu said.
Putu explained that his agency interfered in the case of Miwon and Sun Hung Kai because it dealt directly with the investing public's interest.
"If not resolved, it could destroy investors' confidence in stock markets," Putu said. He added that the case could set a bad precedence for the development of local stock markets.
None of Sun Hung Kai executives were available for comment yesterday.
The company is 85 percent owned by Sun Hung Kai Securities Ltd. of Hong Kong, 7.5 percent by Utomo Josodirdjo and 7.5 percent by the late businessman Omar Abdalla.
Miwon shares have performed badly since the primary offering. The price fluctuations have never reached its initial price of Rp 1,950. Yesterday, Miwon fell again, to Rp 1,050.
Bapepam recently urged Miwon to hold a public presentation to explain the plunge of the share prices to the investing public and brokers.
Bhakti Halim, a director of Miwon, said his company was not to blame for the price drop because the fundamentals of the company were healthy. He blamed the price fall on market sentiment.
He also refuted that the initial price was too high. He contended that with such a level of pricing, the Miwon price earning ratio stood at 8.63 times, compared with the average ratio of 10 times for the shares of companies operating in the food and food-related industry.
Miwon is 42.35 percent owned by Miwon Co. Ltd. of South Korea, 14.12 percent by Sewon Co. Ltd. of South Korea, 13.41 percent by Intiputra Fikasa, 0.71 percent by Kayo Salim and 29.41 percent by the investing public.
The company produces food seasonings, including monosodium glutamate, dry glutamic acid, natural food condiment, flavored table salt, jelly powder and fishery products. (10/rid)