Telkom appoints PwC to avoid delisting

Telkom appoints PwC to avoid delisting

The Jakarta Post, Jakarta

Publicly-listed telecommunications company PT Telkom announced
on Thursday it had appointed PricewaterhouseCoopers (PwC) to
audit its 2002 financial report in a bid to avoid the delisting
of its shares in the U.S. stock market.

Telkom said in a press statement that PwC had accepted the
task, but the audit process might take between 2 and 3 months.

This has raised concerns that Telkom would not be able to meet
the July 15 deadline set by the U.S. Securities & Exchange
Commission (SEC), sending the company's shares on the Jakarta
Stock Exchange down by 0.6 percent at midday.

Telkom said it would ask for an extension of the deadline.
Dow Jones said that the company has hired New York law firm
Skadden, Arps, Slate, Meagher & Flom LLP to assist it in talks
with the SEC.

The SEC has demanded that Telkom, whose shares are both listed
in Jakarta and on the New York Stock Exchange, resubmit its 2002
accounts because the initial report was audited by an accounting
firm which was not properly registered in the U.S. The U.S.
market watchdog gave Telkom until June 30, extendible until July
15, or risk delisting

Telkom, which is 51 percent controlled by the government, has
run up against difficulties in quickly fulfilling the SEC demand
as many of the major international accounting firms cannot audit
the Telkom accounts due to conflicts of interest.

Deloitte Touche Tohmatsu audited Telkom's 2001 results but
left the company last year after a dispute with the government
over the audit of another state-owned company.

At the time PwC was still auditing a Telkom joint venture,
although it is no longer in that job now, making it free to work
for Telkom.

According to the initial version of the 2002 finance report,
Telkom made a net profit of Rp 8.34 trillion, nearly double the
2001 result.

Telkom's shares in Jakarta fell by 0.6 percent to Rp 4,350 in
the first trading session on Wednesday as investors feared that
the company would not be able to meet the SEC deadline. But late
buying in the company lifted the shares by 1.1 percent to Rp
4,425 after investors came to believe that Telkom's success in
finding an acceptable auditor was a positive step in resolving
its problems with the SEC.

"It's good news for Telkom in the long run," Sjed Al Idid, a
telecom analyst at ING in Singapore, was quoted by Dow Jones.
"The news ended uncertainty about Telkom's ability to name an
auditor that is in compliance with the SEC."