Telkom ordered to pay dividends

The Jakarta Post, Jakarta

The government said on Wednesday it would require all publicly listed state-owned companies, including telecommunication firm PT Telkom, to pay their annual dividend to the state coffers in accordance with the regulations, and warned of sanctions for those who failed to comply.

Ministry of Finance Director General of Financial Institutions Darmin Nasution, said that unless the companies could prove they were having liquidity problems, they should all pay their dividend to the government within one month at the latest after the company's shareholders' meeting.

"That's what the regulations say. Otherwise, a penalty will be imposed on them, such as a monthly fine of two percent of their total obligation," Darmin said on Wednesday on the sidelines of a meeting with the House of Representatives Commission IX on financial affairs.

In its annual shareholders' meeting last week, the board of directors of the country's largest telecommunication firm asked the government to allow it to make the dividend payments in two installments.

The issue remained undecided until the end of the meeting.

The government is supposed to obtain 50 percent of the total profit recorded by the company last year, which is around Rp 2.125 trillion (US$260 million).

As of last year, the company managed to post a 41.2 percent increase in its audited consolidated net profit to Rp 4.25 trillion, up from Rp 3.01 trillion in 2000. The company's net income per share also rose to Rp 421.64 from Rp 298.61.

Darmin added the huge profits indicated Telkom was by no means in financial difficulties.

Meanwhile, in last week's meeting, the government rejected the company's plan to issue $100 million in bonds as it would raise Indonesia's corporate debts in dollars. It was feared this could adversely affect the rupiah in the future.

The government also made significant changes to Telkom's boards of directors, on the grounds that they were not capable of running the company.