Acquisition case of Matahari on escalating tension: Bapepam-LK probes the allleged financial engineering

Thursday, 02/03/2010 00:00 WIB

Acquisition case of Matahari on escalating tension: Bapepam-LK probes the allleged financial engineering

Irvin Avriano A.

for Bisnis Indonesia

JAKARTA: Capital Market and Financial Institution Supervisory Agency (Badan Pengawas Pasar Modal dan Lembaga Keuangan/Bapepam-LK) found out the financial engineering practice in the acquisition process of major shareholding of PT Matahari Department Store Tbk.

"There is similarity or it might be said so (financial engineering) due to the complicated transaction. The difference is that financial engineering is commonly done with investment product. But this case tends to a transaction," said Chief of Bapepam LK Ahmad Fuad Rahmany yesterday.

He also conceded the authority has probed some irregularities in the divestment process of 90.76 percent shares of Matahari Department Store (MDS) by its holding firm, PT Matahari Putra Prima Tbk, to CVC Capital Partners.

It also questioned the fake transaction of MDS done by the IDX which was deemed the command of Bapepam-LK.

Bapepam will call for Matahari Putra and its subsidiary firm to suspend the extraordinary general meeting of shareholders (EGMS) on the acquisition.

Both emitters are urged to have public expose to clarify the acquisition issues and their schemes of the acquisition proceeds allotment.

"We send the letter today (tomorrow). Bapepam-LK intends the shareholder of Matahari Putra not to suffer from losses from MDS divestment as most MPPA revenues are generated from MDS," he said.

Fuad considered the clarification addressed by the company on the use of retail business development fund lacked of detail scrutiny. The capital market authority considered the stocks sales are potentially to cut down the shares value of Matahari PUtra in the long run.

He said the clarification and call for MPP EGMS suspension are deemed the follow up of the Legislatives' call when the capital market authority here was summoned by the Legislatives early this month and found out the irregularities in the transaction of the subsidiary firm of Lippo Group here.

The capital market authority also call for cooperation with Bank Indonesia dealing with the MDS divestment transaction by Matahari Putra. The meeting with BI is scheduled this week.

Fuad said this is necessary due to the existence of loan provided by the consortium of PT CIMB Niaga Tbk and Standard Chartered Bank Indonesia for MDS worth IDR3.25 trillion.

MDS loan has 98 percent corporate stocks as collateral which will be acquired by Meadow Indonesia with BI rate plus 6 percent.

"We call BI so that they recognize the loan. If it is okay, it is fine. There is no tendency or intention to call off the transaction."

Meanwhile, the securities and transaction bureau chief of Bapepam-LK Nurhaida said the capital market authority has been investigating 28 securities companies dealing with fake MDS stock transaction cases.

"There are 28 securities companies data submitted to IDX. The suspicious trade happened last December to January," he said.

The bureau here has an authority to handle the problem on stock transaction in the bourse.

However, he declined to name some securities firms with alleged stock trade which led to the high stock price at market here.

The allegation deals with the trade with prominent offering following the stagnant and rarely transacted stock price.

Trade of Matahari Putra and MDS stocks recorded the highest price December and January prior to the announcement of MDS divestment scheme which was controlled by Matahari Putra.

President Director of Matahari Putra Benjamin Mailool was not available for comment on the issue. (Bisnis/iaa/pul)