SOEs Asked to Cancel Unfavorable MSOP

The Ministry of SOE has asked some SOEs to cancel the management stock option plan (MSOP) which is not positive for the company.

The Secretary of the SOE Ministry, Muhammad Said Didu, said the government will reject the proposal of MSOP from some SOEs.

"The question is on whether the program will provide significant impact to the company. We call for the directors not to file such proposals," he said when I meet him, last week.

But he said the ministry will let the SOEs to execute the plan if it has been approved by the shareholders. "If it has been approved by the shareholders, there is no option but executing the plan, but it should be executed prudently."

Some SOEs have planned to run MSOP program. Bank Mandiri Tbk will run its third MSOP starting May 7 by offering 309 million stocks to 5,317 staffs. The bank has got the approval from shareholders in their meeting on May 22 2006. The shareholders have ordered the commissioners of the bank to run the program.

The bank also has executed such plan in 2003 and 2005. On the third MSOP, the shares will be offered to the middle-op workers of the bank at the price of IDR1,600 per unit.

The state gas distribution company PT PGN also executed the MSOP program of 54,012,338 units of shares at the price of 90% to the average price during July 13-August 16 2006.
PT Telekomunikasi Indonesia Tbk also has proposed to run such program when the company conducted its EGM on February 28 this year.