Krakatau Steel management must be summoned: House Speaker
Hans David Tampubolon, The Jakarta Post, Jakarta | Wed, 11/03/2010 4:45 PM
House of Representatives Speaker Marzuki
Alie says that the management of state-owned steel manufacturer Krakatau Steel
needs to be summoned to explain the reason behind the company’s controversial
initial public offering (IPO) price.
The
price for the Krakatau Steel IPO has been set at Rp 850 (less than 10 U.S.
cents) per share.
The
price has been deemed as too cheap by economists and analysts because the
valuation of the Krakatau Steel shares could amount up to Rp 1,150 per share.
“The
pricing of the IPO lies within the valuation from the underwriters,” Marzuki
told reporters at the House in Jakarta
on Wednesday.
“However,
the management of the Krakatau Steel must also be able to convince the
underwriters to set a higher price. Therefore, I believe the House needs to
summon both the Krakatau Steel management and the State-owned Company
Ministry,” he added.
Previously, legislator Chandra Tirta Wijaya from the
National Mandate Party (PAN) said that due to the cheap IPO price, the state
could lose a profit of between Rp 450 billion to Rp 750 billion.
