Telkom says benefits of NYSE listing outweigh costs
Telkom says benefits of NYSE listing outweigh costs
Rendi A. Witular, Jakarta
State-owned telecommunications company PT Telekomunikasi
Indonesia (Telkom) said that it wanted to retain its listing on
the New York Stock Exchange (NYSE) as this was in the company's
best interests, despite requests by several government officials
for it to withdraw from the U.S. exchange.
Telkom president director Kristiono said that a recent
internal study by management had concluded that the company would
gain more benefits if it continued to be listed on both the NYSE
and the Jakarta Stock Exchange (JSX).
"We will recommend to the government that the company's
listing on the NYSE be retained as this is a matter of
maintaining our reputation. That is the most fundamental
benefit," said Kristiono after attending a ceremony held by the
JSX on Tuesday.
Kristiono explained that aside from the matter of reputation,
the company also benefited from improved corporate governance,
better supervision and control, and greater efficiencies.
The listing on the NYSE also raised investor confidence at
home in Telkom's operations and performance, he said.
The government holds a 51 percent stake in Telkom, with the
remaining 49 percent being held by the investing public.
Telkom is the largest telecommunications company in Indonesia
and the largest counter on the JSX, accounting for 17 percent of
market capitalization.
Kristiono said that the company would present the results of
the study during its annual general shareholders meeting on July
30. However, the meeting would not be asked to approve the study.
State Minister for State Enterprises Laksamana Sukardi had
previously requested Telkom management to study the possibility
of delisting from the NYSE after the company encountered problems
in meeting U.S. audit requirements.
Laksamana had said that the listing on the NYSE was
unnecessary due to the high costs that the company had to bear,
especially after the financial audit problems emerged.
Problems with the Telkom audit first came to light last year
when the U.S. Securities and Exchange Commission (SEC) rejected
the company's initial 2002 financial accounts as audited by the
Indonesian accounting firm, Eddy Pianto.
The SEC demanded that Telkom resubmit the audited 2002
accounts as soon as possible or risk being delisted from the
exchange.
After more than seven months of uncertainty, Telkom managed to
avoid delisting by finally resubmitting its accounts in February.
Elsewhere, Kristiono said that Telkom planned to allocate 40
percent of the company's 2003 net profit for the paying of a
dividend this year.
Telkom recorded a net profit of Rp 6.08 trillion (US$681
million) last year, down 24.28 percent from the Rp 8.03 trillion
recorded in 2002 due to the absence of extraordinary gains.
Telkom shares ended Rp 100 lower at Rp 7,450 on the JSX at the
close of Tuesday's trading on the back of profit-taking.