Transparency vital to restore trust: Aburizal

JAKARTA (JP): Chairman of the Bakrie Group, Aburizal Bakrie, said yesterday that Indonesia should improve transparency in politics, economics and the corporate level to restore foreign investors' confidence in local corporations.

Speaking on the group's restructuring, Aburizal said such transparency was needed to attract more foreign investment, including in portfolio, which had evaporated.

"There are many questions from foreign fund managers about political transparency. And I believe the government can accommodate such concerns," Aburizal said.

"And I also believe that in the future, transparency at the economic and corporate level will also improve because the current crisis will teach all of us about the importance of it," he added.

To improve transparency in economics, Aburizal said, the government should help create healthier competition in the domestic market.

Unfair practices like giving protection, connection approaches and collusion should be reduced and then be eliminated altogether, he said.

Aburizal also suggested that big business groups improve their transparency so that they could attract not only foreign but also domestic investors to buy their listed stocks.

He called on big groups to consolidate and restructure their businesses to focus more on their core sectors to survive the economic hardship.

"This crisis is a blessing in disguise. This situation will force companies to improve and strengthen their ability and capability to compete," he said.

He predicted that many companies would pursue more consolidation and restructuring than expansion during the economic crisis.

Companies would also be more prudent in borrowing money from banks. They would not let them be exposed to exchange risks any more, for instance.

Companies should now conduct financial restructuring to adjust to the current situation, he said. Their debt-to-equity ratio had to be improved so that they would not be so leveraged anymore.

To improve the debt-to-equity ratio, Aburizal suggested that majority shareholders float their companies' shares at stock markets to raise fresh funds as equity or that they conduct private placement.

Consolidation

Aburizal also announced yesterday his restructuring of the Bakrie Group to "enhance efficiency, productivity and performance".

The restructuring included the realignment of its core businesses and plans to divest some of its companies not related to core businesses.

The Bakrie Group currently has three holding companies: PT Bakrie Investindo, PT Bakrie & Brothers and PT Bakrie Capital Indonesia, each of which controls wide-ranging companies.

Both Bakrie Investindo and Bakrie Capital are 100 percent owned by the Bakrie family. The family, through Bakrie Investindo, controls 51 percent of PT Bakrie & Brothers. The other 49 percent stake in Bakrie & Brothers belongs to public shareholders.

Besides controlling Bakrie & Brothers, Bakrie Investindo has interests in television, mining and toll roads.

Bakrie & Brothers focuses on telecommunications, agribusiness and infrastructure-related businesses.

Bakrie Capital manages banking and financial services, property, media, and mining and energy businesses.

"To achieve our goals, we will not hesitate to sell that which is not part of our core businesses. We also plan to sell shares to the public through initial public offerings or private placement," Aburizal said.

Aburizal, who formerly became chief commissioner of all three holding companies, relinquished his positions at Bakrie & Brothers and Bakrie Capital.

He will still remain chief commissioner at Bakrie Investindo to coordinate the direction of all businesses under the group.

Chief commissioner positions for Bakrie & Brothers and Bakrie Capital were transferred to Aburizal's brothers, Indra U. Bakrie and Nirwan D. Bakrie. (rid)