Jakarta. The anti-monopoly agency has singled out and fined Nippon Indosari Corpindo, Indonesia's largest producer of bread products, for failing to report a corporate action in January this year.
The Commission for the Supervision of Business Competition (KPPU) announced the verdict on Monday and ordered the company – best known for its Sari Roti brand – to pay a Rp 2.8 billion ($196,000) fine for failing to notify the commission of its acquisition of pastry producer Prima Top Boga.
Nippon Indosari acquired a 51 percent stake in Prima Top Boga for Rp 31.5 billion on Jan. 24 to expand its operations as the latter's main business is focused on frozen foods and pastry products that have longer shelf lives.
Nippon Indosari also secured Prima Top Boga's technology and business operations through the acquisition.
The KPPU said Nippon Indosari was supposed to give notice of its corporate action by March 23, but that the company was four days late with its report.
The KPPU cited a 2010 government regulation requiring companies to notify the commission within 30 business days after acquiring another business unit.
In a filing to the Indonesia Stock Exchange (IDX) on Wednesday, Nippon Indosari said as a foreign investment company it had complied with the government's regulation by reporting its corporate action to the Investment Coordinating Board (BKPM) and secured the agency's approval on March 1.
"We then reported the corporate action to the KPPU on March 29, as it was still within 30 business days after we had received the approval letter from the BKPM," Nippon Indosari said in a statement signed by its corporate secretary, Sri Mulyana.
Foreign companies are majority shareholders in Nippon Indosari, which comprises Japan's Pasco Shikisima Corporation, New York-based private equity firm KKR & Co (through Demeter Indo Investment), British Virgin Island-listed company Bonlight Investment and Indoritel Makmur International.
The remaining stakes of Nippon Indosari are held by the public.
The bread maker said it is still waiting for the official notice from the KPPU to arrive within 14 business days.
"Once we receive the letter, the company will weigh its options," a company representative said, adding that the KPPU's decision would not affect Nippon Indosari's day-to-day operations.
The company recorded a 5.6 percent year-on-year increase in net income to Rp 102 billion in the first nine months of this year. It booked revenue of Rp 1.98 trillion between January and September, up 8.8 percent from the same period last year.