Timber firms need no permit to go public

Timber firms need no permit to go public

JAKARTA (JP): Minister of Forestry Jamaludin Suryohadikusomo said yesterday that timber companies intending to sell their shares to the public no longer need to require permission from his office.

He said that the Ministry of Forestry will instead publicly disclose the viability of any timber companies intending to sell their shares to the public.

"The public disclosure will give potential investors a clear outlook about a timber company planning to go public. They will, therefore, decide for themselves whether or not to buy its stocks," he told newsmen at his office.

A timber company planning an initial public offering of shares was earlier required to produce a recommendation letter from the Minister of Forestry before selling shares to the public. The minister's recommendation letter, however, did not serve merely as a reference but more as permission. At least two companies have delayed their initial public offering plans due to the lack of such a recommendation letter.

Companies

One of the companies, PT Artika Optima Inti, a timber subsidiary of the widely diversified Djajanti Group, failed to obtain the letter of recommendation as the minister of forestry considered its forest harvesting potency much smaller than the capacity of its plywood manufacturing mills. The other company, PT Surya Damai, also failed to obtain recommendation for a similar reason.

Jamaludin said recently that if the recommendation letters were given to those two companies, the government could be charged with encouraging illegal lumber felling. Timber companies often violate the government's regulations to selectively cut trees in order to meet the high capacity of their timber manufacturing units. In addition, they also often buy logs stolen from protected forests or nearby forest concession areas.

"What really concerns me is that timber companies might only try to make profits without giving any attention to the forest preservation effort," he said.

The minister said yesterday that his ministry will no longer issue recommendations to timber companies intending to go public but will instead appoint an independent consultant to assess the quality of a company's forests and the capability to sustain a lumber supply to their timber manufacturing units. He said that the results of the researches will be publicly announced.(hen)