Hary Tanoe vs Mbak Tutut

If you look at the three television stations, RCTI, TPI, and GlobalTV lately, then you will find that almost every day or even every moment, the screen below it shown news in running text form as usual running displayed by Metro TV. Its content is primarily a matter of dispute of TPI ownership between Hary Tanoesoedibjo and Ms Siti Hardiyanti Rukmana alias Mbak Tutut, where the points highlighted is the defense towards Hary Tanoe and discredit against Mbak Tutut.

As you have already known, there is currently a dispute between Mr. Harry and Mbak Tutut about 75% of TPI's ownership, the subsidiary of Media Citra Nusantara (MNCN). It is actually an old case, which re-emerged after the Ministry of Justice and Human Rights revoked the ownership status of Mr. Hary of 75% of TPI shares, because presumably, there were infelicity. Previously on 2002, Mr. Hary take over 75% of TPI’s shares from Mbak Tutut as a form of conversion of debt, where the rest of 25% remained held by Mbak Tutut. The infelicity that was claimed by Mbak Tutut was: Mr. Hary accused of using administration of the legal aid system (Sisminbakum, just google it) to take over 75% of TPI’s shares, while that system was illegal. The problem of Sisminbakum itself was currently being legally disputed with suspect of Yusril Ihza Mahendra, former Minister of Justice and Human Rights, and Hartono Tanoe, brother of Mr. Hary.

The biggest question is, who will win? If we research, Mr. Hary’s TPI has already quite troubled with several parties. Previously on 5 September 2006, TPI has been sued by TVRI because of the debt matter. TPI has also been sued for bankruptcy by Capital Global Ltd because they have failed to pay bonds amounted to US$ 53 million. It’s just because he’s one of the media moguls in Indonesia (like Aburizal Bakrie with TvOne and Surya Paloh with Metro TV), then the media rarely indulgence the news. Those cases like completed by itself. However, because this time the rival is quite equal (Mbak Tutut is one of the inheritors of Cendana Family), then inevitably, this case leaked to the public. Because the both sides were so strong, even Bapepam as the authority opted for being neutral as the safest option.

No matter how strong Mbak Tutut was, yet Mr. Hary remain held the ultimate arsenal, which is media. As we have known, the control of media also means the control of public opinion. If the public stuffed with information that Mr. Hary is innocent, then Mr. Hary is innocent! Lately, Mr. Hary has launched a propaganda that he’s on the right side through all media under MNCN, including RCTI, Global TV, and TPI. And this is what is called as ‘street court’, where the public have already had their opinion about who’s right, and who’s wrong, due to the media influence, even long before the court tapped the gavel.

Mbak Tutut did not have that ‘weapon’ at all, and unfortunately, she did not close enough with Mr. Aburizal or Mr. Surya Paloh. So? We indeed didn’t know who’s right and who’s wrong in this case (and maybe we would never know), but it looks like Mr. Hary will be the winner.

So what is the relationship between the disputes between these two giants with us as retail investors?

Did you notice that since this case happened, MNCN’s price in the stock exchange fell down from 435 into 345? There was no technical or fundamental factor that can explain the decline, so it was most likely because of the case.

On the first quarter 2010, TPI had total assets of Rp918 billion, where 75% or Rp688 billion of it was held by MNCN. MNCN assets on first quarter 2010 was Rp4.3 trillion, so if Mbak Tutut capable to take over 75% of TPI’s shares, then MNCN would lose for about 16% of its assets. That amount is fairly big so that it made lots of investors to worried. In addition, the investors maybe see for the first time that Mr. Hary won’t be able to escape as he did in the past. It was because Mr. Hary should deal with two problems at once: Mbak Tutut’s claim and Sisminbakum’s matter that dragged his brother, Hartono Tanoe. Consequently, MNCN continued to fall until the position of 330. However, because that number was technically below the support line, MNCN was immediately rose back, and now in position of 345.

Back to MNCN’s shares matter. The price of 345 made MNCN became one of the bluchips with lowest price for now, either technically or fundamentally. Technically, MNCN’s reasonable price is 395. Fundamentally, MNCN had pretty good performance, where its net income on first quarter 2010 increase 191.3%, so the price of 345 generated PER of 6.2 times, which was very low. The price of 395 would generate PER of 7.1 times, which was still fairly low. MNCN indeed is the favorite of Bhakti Group (Mr. Hary’s conglomerate) with very good performance if compared with other Bhakti Group’s subsidiaries.

So, if later this case completed, where Mr. Hary come out as the winner (it looks like so), then almost certain that MNCN would soar and back to its previous position or even higher, as long as JCI’s condition back to normal. Don’t forget that Mr. Hary is not only an ambitious entrepreneur, but also a tough one, and he knows well how to use media to protect himself.

It’s just that we haven’t know when this case will completely end, and who will be the winner. Although Mr. Hary has bigger chance to win, but it doesn’t mean that Mbak Tutut doesn’t have the chance at all. If you are interested in MNCN, it’s better to wait and see. But clearly, basically it is unlikely for MNCN to fall lower than 330.

Original article was written on July 5^th, 2010.