Telkom denies buying staff shares

BANDUNG, West Java (JP): PT Telekomunikasi Indonesia (Telkom) yesterday ruled out suggestions it planned to buy Telkom shares held by its employees.

A Telkom executive, Thomas Widjanarto, also denied allegations that the telecommunications company had established a special division to purchase the employees' shares.

He acknowledged the company had recently established a new management division, called the Employees' Shares Management Division.

"The new division is, however, not assigned to buy employees' shares but to help them if they want to sell their stocks," he said.

Telkom's 43,000 employees bought a total of 116.67 million shares or 1.25 percent of the company's shares during its initial public offering (IPO) in October last year. The employees were prohibited from selling their shares until Nov. 14, 1996.

Telkom shares held by 23 institutional investors were also locked up until November 1997 to help stabilize the shares' prices on the stock exchange.

Newspaper reports earlier this week said the Employees' Shares Managing Division was established as a buffer division to protect the company's share price from plummeting, particularly after the lockup period of the employees' shares ends.

Telkom last week announced plans to distribute about three million shares to Indonesian individuals and cooperatives as a bonus for their loyalty in not selling their shares for a year.

The company yesterday said the bonus shares would be taken from the government's stake in the telecommunications company, which floated its shares on local and overseas markets in November last year.

Individual investors who bought at least 500 shares during the IPO period will receive 50 additional shares as bonuses while cooperatives which bought at least 5,000 shares will be given additional 500 shares, on the condition they do not sell their stocks for at least a year.

Thomas said Telkom would buy the bonus shares, which would be allocated to individual investors at half the stock price quoted on the local stock exchange.

"At the current price of Rp 3,500, Telkom would spend around Rp 5 billion for such a purchase," he said.

He said the government's spending on the bonus shares' purchase would not pose any dilemma for Telkom because the action was aimed at acknowledging local individual investors' commitment to keeping their shares and encouraging public participation in the capital market.

Thomas said the payment for the bonus shares to cooperatives would be wholly borne by the government. (17/hen)