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TPS Food’s meeting turns chaotic amid internal fight
A seven-hour annual shareholders meeting of publicly listed food company Tiga Pilar Sejahtera Food (TPS Food) recently turned chaotic as conflict arose among its board of commissioners, directors and shareholders
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seven-hour annual shareholders meeting of publicly listed food company Tiga Pilar Sejahtera Food (TPS Food) recently turned chaotic as conflict arose among its board of commissioners, directors and shareholders.
TPS Food president director Joko Mogoginta, who is also the company’s founder, walked out of the meeting room after the second agenda item of the event on Friday, which sought shareholders’ approval of the firm’s 2017 annual report.
Before leaving the room, Joko said in a loud voice that two commissioners, Jaka Prasetya and Hengky Koestanto, were trying to take over the company’s management.
Aside from Jaka and Hengky, the company’ board of commissioners includes Anton Apriyantono and Kang Hongkie Widjaja. Anton Apriyantono was an agriculture minister under the administration of former president Susilo Bambang Yudhoyono.
Joko accused Jaka Prasetya, who represented global investment firm KKR & Co., of trying to pressure president commissioner Anton Apriyantono to revoke his signature from the annual report in order to open room for a possible change in the board of directors.
“This is clearly a hostile takeover! I founded this company 26 years ago!” Joko yelled after walking out of the meeting room at the main hall of the Indonesia Stock Exchange (IDX) in Jakarta.
Meanwhile, Jaka denied in a statement received by The Jakarta Post that there was a plan to “take over” the company, saying that the goal of KKR was to build good corporate governance and management amid ongoing internal problems.
“We are still optimistic with Indonesia as an investment destination and confident about the integrity of its legal system,” he said on Sunday.
TPS Food, which sells rice and produces the iconic snack Taro, has been going through a rough situation following a rice fraud scandal last year involving its subsidiary PT Indo Beras Unggul (IBU). IBU was accused of selling subsidized rice as a premium category product.
According to its annual report, TPS Food suffered Rp 551.9 billion (US$38.39 million) in losses last year, compared to Rp 593.47 billion in profit in 2016.
During Friday’s meeting, 60.49 percent of its shareholders refused to give approval for the company’s 2017 annual report, saying they did not trust the management to handle the finances.
Several shareholders pointed out a suspicious and huge amount of transactions involving a number of companies affiliated with Joko Mogoginta.
“Instead of settling the debts, the board of directors decided to use the funds for other activities that benefit themselves. As a result, Tiga Pilar Sejahtera failed to pay bond interest,” said David Lowardi, a retail investor of TPS Food, on the sidelines of the meeting.
The shareholders agreed to dismiss the company’s board of directors, which would be replaced with new members selected by the board of commissioners and sought approval during an upcoming extraordinary general shareholders meeting.
The company’s commissioner Jaka Prasetya said the management takeover had been done as it should be, and that there was no attempt at a hostile takeover as accused by Joko Mogoginta.
“If it was a hostile [takeover], then we would buy more shares; but we didn’t,” Jaka said.
After Friday’s event, Anton Apriyantono, together with Joko Mogoginta and finance director Sjambiri Lioe, held a press conference in which he said a public notary had listed all problems discussed during the meeting and would submit them to the Financial Services Authority (OJK) to be reviewed.
Sjambiri said shareholders and commissioners were expected to reconcile and discuss the company’s internal problems as they would negatively affect its 5,000 employees.
Should all members of the board of directors be dismissed, he said there was a fear that the company’s business would not run smoothly, as the current directors were considered more experienced.
“We think a good solution has yet to be reached,” he said. “We’ve agreed on the change of directors as long as it is done in accordance with the rules.”
