Bapepam drops inquiry into BCA share<\/p>\n
Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
The Capital Market Supervisory Agency (Bapepam) has
\nunexpectedly dropped an investigation into suspected manipulation
\nof PT Bank Central Asia (BCA) share prices, citing that it lacked
\nevidence to justify prosecution.<\/p>\n
Bapepam chairman Herwidayatmo said on Monday that although BCA
\ntrading patterns looked suspicious, the agency had found no proof
\nof improper conduct.<\/p>\n
\"When looking at BCA's trading pattern, it looks quite
\napparent that something was fishy,\" he said in a press
\nconference.<\/p>\n
Bapepam's announcement ended a two-month probe of the case,
\nwhich surfaced at a time when the government was struggling to
\nsell a 40 percent stake in BCA, the country's largest retail
\nbank.<\/p>\n
The agency initially suspected that the price of BCA shares
\nhad been manipulated to a certain price level in the trading
\nperiod between May and mid-July.<\/p>\n
Between May 15 and June 12, several securities companies had
\ndominated the purchasing of BCA shares, causing its price to
\nsurge.<\/p>\n
However, from June 13 until June 29, the same companies
\ndominated the selling of BCA shares, a move that drove down share
\nprices.<\/p>\n
Investors manipulating BCA share prices would have benefited
\nfrom the capital gain achieved through buying cheap and selling
\nhigh.<\/p>\n
Bapepam's investigation included the state pension fund
\ncompany PT Jamsostek, PT Lippo Investment, and state securities
\nfirms PT Danareksa Securities and PT Bahana Securities.<\/p>\n
Herwidayatmo said that, although the four firms had suspicious
\ntrading patterns, transaction volumes were too small to profit
\nfrom.<\/p>\n
\"If compared to the entire volume of transactions by each
\nrespective company, the percentage of (suspicious) transactions
\nis insignificant,\" he explained.<\/p>\n
He added that such transactions did not fall under the
\ndefinition of share manipulation as defined by law.<\/p>\n
Parties found guilty of share price manipulation could face
\npenalties of up to Rp 15 billion (about US$1.54 million) and jail
\nterms of up to 10 years under Article 91 of Law No 8\/1995 on the
\ncapital market.<\/p>\n
According to Herwidayatmo, BCA's share prices were driven by
\nnews of the government's plan to divest its stake in the bank.<\/p>\n
In early June, the Indonesian Bank Restructuring Agency
\n(IBRA), which is in charge of the sale, said foreign investors
\nexpressed interest in the bank.<\/p>\n
BCA share prices began to climb until the end of June, when a
\nsudden sell-off by securities firms led to a sharp drop in its
\nprice. Herwidayatmo gave no explanation as to why the shares
\nfell.<\/p>\n
The sale of BCA is part of the government's economic reform
\nagreement with the International Monetary Fund (IMF).<\/p>\n
The government divested the first 22.5 percent stake in BCA
\nthrough an initial public offering in May last year.<\/p>\n
IBRA sold a 10 percent stake through a secondary public
\noffering last July. Another 51 percent is slated for sale under a
\nprivate placement scheme sometime this year.<\/p>\n
Danareksa was also acting as the lead underwriter for the
\nsecondary public offering. The state securities firm was later
\nalso charged with insider trading.<\/p>\n
The insider trading charges were leveled against Danareksa for
\nits role in dumping the shares ahead of the secondary offering
\ndate, when the price was around Rp 1,000.<\/p>\n
Based on Danareksa's recommendation, IBRA had agreed to an
\noffering price of Rp 900, but Herwidayatmo argued that here too,
\nBapepam found no evidence to support charges of insider trading.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bapepam-drops-inquiry-into-bca-share-1447893297",
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