Jakarta. KDB Tifa Finance (TIFA) is now garnering attention for not distributing dividends since the Korean Development Bank (KDB) acquired the company in 2020.

The company is also now failing to meet the free float minimum requirements. TIFA’s public share ownership only stands at 0.35 percent, much lower than the minimum 7.5 percent required by the regulator. If TIFA fails to comply, the company will have to delist from the stock exchange, according to the existing regulations. 

TIFA’s director Ester said that the company would try to comply with the free float regulations. However, she did not provide any concrete steps that the company would take to fulfill the free float. 

"KDB will maximize the relaxation provided by the OJK [Financial Services Authority] to fulfill the free float provisions," Ester said in Jakarta on Thursday. 

Since 2020, KDB has requested two extensions to fulfill the free float requirements from the OJK. The extension for fulfilling the requirements for the free float share portion has also been given until November 2024. KDB Tifa Finance should have fulfilled the Free Float provisions in 2023.

TIFA’s decisions and lack of concrete steps --which might come off as an attempt to stall time-- have let down its investors, particularly the smaller ones who cannot sell their shares. TIFA’s shares also now lack market value as they are now included in the exchange’s special monitoring board. 

One shareholder who did not want to be named said that the results of TIFA’s recent annual general meeting did not provide any clarity on what the company would do to increase public ownership shares.

"This does not protect investors. We asked whether there was an intention to increase the number of shares. They said that in the process, maybe shareholders would sell. But there were no details. In fact, processes can start now, for example a rights issue, but existing shareholders don't know when to do it," this unnamed shareholder said. 

The dividend absence has made TIFA’s shares less attractive, making its trading to be very illiquid. TIFA used to always distribute its dividends prior to KDB’s acquisition. 

Earlier this week, TIFA held an annual general meeting of shareholders, which announced that the company would not distribute dividends for the 2023 financial year. KDB Tifa Finance President Director Cho Jaeseong has not commented on why the company never distributed the dividends. 

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