Telkom will not be able to meet SEC deadline

The Jakarta Post, Jakarta

Publicly listed telecommunications firm PT Telkom said on Monday it would not be able to resubmit its 2002 financial report on schedule as required by the U.S. Securities & Exchange Commission (SEC).

Such a failure could mean the company will be delisted from the New York Stock Exchange (NYSE). Telkom shares are listed on both Jakarta and New York exchanges.

"After speaking with our new auditor PwC (PricewaterhouseCoopers), it is absolutely clear that Telkom will not meet its filing deadline ... even with a 15-day extension," said Telkom head of investor relations Rochiman Sukarno.

Telkom has been ordered by the SEC to resubmit its 2002 financial report after an earlier version was rejected because it was audited by a local accounting firm which is not registered in the U.S. or with the SEC. Telkom was given until June 30 (yesterday) to send in a new one, but that deadline can be extended until July 15 if necessary.

Telkom has run up against difficulties in fulfilling the SEC demand as many of the major international accounting firms cannot audit the Telkom accounts due to conflicts of interest.

The company last week finally appointed PwC to audit the financial report, but has said that the audit could take up to three months to complete.

Even with the extension, it seems Telkom will not fulfill its obligations to the SEC.

"... No further extension is possible, and our new report will be late," Rochiman said.

The press release did not go into detail about the consequences of failing to meet the SEC deadline, but earlier reports said that this may cause the company's shares to be delisted from the NYSE.

Telkom, which is 51 percent controlled by the government, has hired New York law firm Skadden, Arps, Slate, Meagher & Flom LLP to assist it in talks with the SEC.

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 shares on the Jakarta Stock Exchange closed 0.5 percent higher on Monday at Rp 4,625 on continued buying from investors following last week's announcement of the PwC appointment.

Telkom shares had fallen by 8 percent since news about its auditing problems broke on June 12, and its current price remains below its June 11 close of Rp 4,675.