JAKARTA (TheInsiderStories)–The investors of Indonesia’s property company PT Bakrieland Development (IDX: ELTY) met with people from the Financial Service Authority (FSA) on Monday (9/7) as an effort to reject the company’s reverse stock plan.
The subsidiary of Bakrie Group plans to conduct a 10-for-1 reverse stock to restructure Rp500 billion debt from PT Geo Link Indonesia to share conversion. ELTY’s issued and paid share currently reached 43.52 billion shares, which will drop to 4.35 billion shares when the reverse stock is done.
In the hearing, the investors argued reverse stock done in other companies within has made share price fell significantly.
One example is the reverse stock of PT Bakrie Sumatera Plantations (IDX: UNSP) and PT Energi Mega Persada (IDX: ENRG) that fell 50 per cent in the period of a year after reverse stock. In addition, the share of PT Bakrie & Brothers (IDX: BNBR) fell to Rp70 after reverse stock from Rp500 before reverse stock.
“From the available evidence, we assess ELTY’s reverse stock plan allegedly violate the law in the aspects of accounting, disclosure, and information disclosure, thus having criminal consequences,” the ELTY’s investors said in a press release, as quoted by Kontan.
The investors presented the alleged violation of Capital Market Law No. 8/1995. Accordingly, they expected the FSA not only conducts supervision and observation but also uses one of its powers to investigate the case.
One of the ELTY’s alleged violation of the law is the sales PT Bukit Jonggol Asri share to PT Gili Tirta Anugerah. Bukit Jonggol Asri is owned by ELTY subsidiary, PT Graha Andrasentra Propertindo. ELTY should get funds of Rp800 billion in 2014 through its transaction, but the sale ended with a receivable of 500 hectares of land, with certification status still not completed until now.
ELTY recorded Rp1.3 trillion in profit that can be attributed to the parent company in the first quarter of this year. that despite the company’s revenues only reached Rp287.2 billion in the first quarter of this year, down 14.5 per cent from Rp336 billion in the first quarter last year.
In the income section of the financial statement, there is an account of other profit that reached Rp3.03 trillion, as reported by Bareksa. Whereas in the first quarter of 2017, the company recorded Rp0 in other profit.
The gain was due to the restructured debt amounting to Rp3.03 trillion which was not recorded in the previous year period. In the financial statement, this is in another profit post. Debt settlement of debt obligations made the profit before taxes increased drastically to Rp3.11 trillion compared to a pre-tax loss of Rp5.24 billion until March last year.