Alleged BII scam a test for Bapepam, JSX<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Allegations of impropriety involving the trade in Bank
\nInternasional Indonesia's shares have put on the line once again
\nthe image of the capital market authorities here -- already known
\nfor being too lenient in the past with violators of stock market
\nregulations.<\/p>\n
Without resolute action by the Capital Market Supervisory
\nAgency (Bapepam) and the Jakarta Stock Exchange, the local market
\nwill remain a happy hunting ground for violators, experts said.<\/p>\n
Institute for the Development of Economics and Finance (Indef)
\neconomist Dradjat Wibowo and lawmaker Faisal Baasir said over the
\nweekend that law enforcement was the key to deterring illegal
\nactions and eventually improving the market's credibility.<\/p>\n
\"That's crucial because the capital markets everywhere often
\nfall victim to inappropriate, administrative or procedural
\nviolations, and even crimes,\" said Dradjad, while also deploring
\nthe fact that Bapepam and the JSX had seemed reluctant in the
\npast to impose severe penalties against violators.<\/p>\n
He recalled the Lippo Bank case, which centered on the listed
\ncompany's controversial issuing of two different sets of
\nfinancial statements, in response to which in the end Bapepam --
\nafter non-stop public pressure -- imposed a relatively small
\nfine. This was despite the fact that by international standards
\nthe Lippo case might well be considered a massive scam.<\/p>\n
The allegations of impropriety in the BII case revolve around
\nthe fact that the bank's share price was declining before the
\nIndonesian Bank Restructuring Agency (IBRA), which controls BII,
\nlaunched a block sale of a 17.43 percent stake in the bank on
\nDec. 16 last year.<\/p>\n
The price went far above the Rp 90 peg IBRA had decided on for
\nthe block sale. In October, it even reached Rp 145 before
\nhovering around Rp 95 in the last days prior to the sale.
\nAllegations were rife that the price had been deliberately
\nbrought down so that certain well-known investors could purchase
\nBII shares at the lower price.<\/p>\n
As the rumors continued, the JSX launched an investigation
\ninto the affair two weeks ago, with 7 brokerage firms having been
\ninvestigated so far.<\/p>\n
The JSX management said on Friday that 5 to 6 more firms would
\nalso be investigated in the near future.<\/p>\n
None of these firms have been named officially.<\/p>\n
Elsewhere, Faisal, a legislator and member of the House's
\nfinance and banking committee, express concern over the possible
\nlosses the country might have suffered if the rumors turned out
\nto be true.<\/p>\n
It was therefore crucial for Bapepam and the JSX to uncover
\nthe truth behind the sale so the losses, if any, could be
\nrecovered, Faisal said.<\/p>\n
At the price of Rp 90 per share, IBRA collected around Rp 750
\nbillion.<\/p>\n
To date, IBRA has sold 71 percent of BII, having previously
\nsold 51 percent of the bank to the Sorak Consortium and 2.57
\npercent through the stock market.<\/p>",
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