TIFA - PT. KDB Tifa Finance Tbk

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JAKARTA. Retail investors highlighted OJK and the stock exchange authority’s lack of effort in protecting investors towards PT KDB Tifa Finance Tbk (TIFA) with its free float rate of only 0.35% and the lack of dividend distribution in the past 5 years.

During the Annual General Meeting of Shareholder on Thursday (13/6), a retail investor questioned the management of TIFA regarding its free float rate, which is maxed out at 0.35%, far below the stock exchange’s requirement of 7.5%, as well as the lack of dividend distributed from 2019 to 2023.

The same investor further inquired that, with this unmet free float and lack of dividend distribution, how would the company take responsibility towards OJK and stock exchange authority.

Ester Gunawan, Director of TIFA, then admitted that the company, until now, has yet to come up with a plan of exercising a corporate action to increase public shares, which is stuck at 0.35% now. “We would probably divest the shares of current shareholders,” she said.

“We also consulted OJK,” added Gunawan. Then, she mentioned that the company is given the time until November 2024 to fulfil the free float requirement according to the applicable regulation.

On the other hand, another source, refusing to disclose their name, said that OJK has granted a deadline extension of free float rate fulfilment twice since Korea Development Bank (KDB) acquires PT Dwi Satria Utama (DSU), which still holds 15% of TIFA’s shares until now.

TIFA’s outstanding shares in public, as of now, only reach 12,726,378 shares out of total 3,552, 213,000 shares. With this free float of only 0.35%, the management still carries no intention of going private.

Until now, TIFA’s stock price remains stagnant at IDR 300 per share. Even more so, TIFA has now entered the watchlist board of Indonesia Stock Exchange. “We wish to be dropped out of the watchlist board,” said Gunawan.

No dividend in sight for 5 years

According to IDNFinancials data, TIFA has yet to distribute any dividend since 2019 until 2023. Nearly the entire net profit collected each year has been accumulated as retained earnings, after deducting small portion as reserves. As of December 2023, retained earnings of TIFA clocked up to IDR 389.75 billion.

In response to this, the management claimed that the company has not been distributing any dividend for the past 5 years because it is rounding up the capital required to further expand the business. (AM/ZH)