Singapore bans Kotjo from takeover bids

Singapore bans Kotjo from takeover bids

SINGAPORE (Reuter): The Stock Exchange of Singapore's (SES)
punishment of an Indonesian businessman for "misleading" the
market is likely to dampen speculation in stocks with big
Indonesian investors, dealers said yesterday.

The SES rebuked Johannes Kotjo on Friday for creating what it
said was "a false market" in the shares of United Pulp & Paper
(UPP), a paper firm in which he and other Indonesian businessmen
had taken large buy options.

The SES banned Kotjo from directorships in any listed firms,
other than those already held, for 30 months.

Kotjo is a director of engineering firm Van der Horst and ice
cream vendor ABR Holdings.

Dealers said the SES's action, which follows six months of
heavy speculation in Singapore firms with prominent Indonesian
shareholders, was a warning to all to abide by the bourse's rules
of disclosure on market-sensitive news. It was also likely to
curb investors' enthusiasm for Indonesian-linked firms.

Shares in several such companies, including UPP and Amcol
Holdings, in which Indonesian businessman Henry Pribadi has a
18.23 percent stake, fell heavily yesterday as the market
digested the SES action after the New Year holiday.

"The bubble has been burst," said Lim Eng Hai, head of
research at J.M. Sassoon & Co. "It won't put an end to takeover
speculation entirely but it will remind the market to look a
little more closely at rumors of takeovers."

Takeover fever swept the Singapore stock market in mid-1995
following a spate of purchases of small and medium-sized local
firms by Indonesian investors.

One of the first was Van der Horst, in which Kotjo and
President Soeharto's son, Bambang Trihatmodjo, had taken stakes.

"Van der Horst had been a rather poor share for some time,"
said William Cliffe, institutional broker at DBS Securities.

"Then Kotjo came in and used his contacts to get some good
contracts in Indonesia. People hope (Indonesians) will have the
same magic touch on other companies."

Just a rumor about Indonesian money has sometimes been enough
to move a share. Often the rumors are inflated or untrue.
Kotjo's reprimand on Friday was for feeding such rumors.

Misleading

The SES said that shortly after he took a series of buy
options in UPP's shares that would have triggered a formal
takeover if exercised, Kotjo made a series of optimistic
statements on UPP's prospects, some of which were misleading.

The SES said Kotjo had suggested in an interview that UPP
might be merged under the new management with another timber
company.

UPP shares soared to S$2.07 (US$1.48) from S$1.21 on the day
of the interview.

But the SES said Kotjo had later admitted there was no
immediate intention of merging the operations of the companies.

"Kotjo's actions had misled the market and created a false
market in the shares of UPP," the SES statement said.
Kotjo was unavailable for immediate comment.

Lim said the SES's action was a warning that takeover deals
would be closely scrutinized and directors of companies must not
suggest things that were not true.

Cliffe said the SES wanted to reinforce Singapore's squeaky-
clean reputation.

"The SES's action is very unlikely to have any impact on the
level of speculative activity in the Singapore market," said
Cliffe "But the focus may move away from Indonesian investors to
another type of play -- probably another regional play."

By yesterday's close, UPP stood at S$2.05, down 62 cents on
more than 12 million shares. Amcol was 16 cents lower at S$3.74
on 5.5 million shares. L&M Group Investment Holdings, in which
Kotjo's consortium holds a 39.74 percent stake, was 50 cents
lower at S$3.32.