Transparency vital to restore trust: Aburizal

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)