Indosat's advisers blamed for rumors on inside trading<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The controversy surrounding the sale of PT Indosat shares
\nescalated on Thursday when Capital Market Supervisory Agency
\n(Bapepam) chairman Herwidayatmo accused the company's private
\nplacement advisors for spreading rumors about insider trading in
\nthe sale process.<\/p>\n
Herwidayatmo said he suspected the advisers were attempting to
\nuse the allegations of insider trading as an excuse for their
\nfailure to meet the sales target for private placement of
\nIndosat's shares.<\/p>\n
\"If they're no good in the selling business just say so,
\nwithout making a mess and looking for a scapegoat,\" he said as
\nquoted by Antara.<\/p>\n
The government's financial advisers for the private placement
\nof Indosat's shares were U.S. investment firm Credit Suisse First
\nBoston (CSFB) and local firm Danareksa Sekuritas.<\/p>\n
The controversy over the sale of the Indosat shares began on
\nWednesday when State Minister of State Enterprises Laksamana
\nSukardi accused U.S. investment firm Merrill Lynch of possible
\ninsider trading prior to last Friday's sale by the government of
\n8.1 percent of its stake in Indosat.<\/p>\n
The state minister called on Bapepam to investigate the
\nmatter.<\/p>\n
Merrill Lynch is the financial adviser for Indosat's planned
\nrights issue later this year.<\/p>\n
The allegations are believed to be based on the fact that
\nMerril Lynch was involved in the massive sell off of Indosat
\nshares last Thursday, which resulted in an almost 5 percent fall
\nin share value.<\/p>\n
This prompted the Jakarta Stock Exchange to suspend trading of
\nthe shares, pending further clarification from the government on
\nits planned sale.<\/p>\n
On Saturday, or two days after the suspension of trade, the
\ngovernment announced it had sold an 8.1 percent stake in the
\ncompany for US$110 million -- less than the initial sales target
\nof 11.32 percent. The shares were sold for Rp 12,000 each -- less
\nthan the market price of Rp 12,600 when trade in Indosat shares
\nwas suspended on Thursday.<\/p>\n
Laksamana said there was a conflict of interest when an
\nappointed financial adviser, familiar with the company's value
\nand market trend, was involved in the major sell off of Indosat
\nshares.<\/p>\n
Herwidayatmo said Bapepam had established a team to
\ninvestigate any possible insider trading.<\/p>\n
However, he noted that the controversy would not have arisen
\nhad Indosat's financial advisers not failed to meet the
\ngovernment's target in the private placement.<\/p>\n
Nevertheless, he went on, Bapepam would continue the
\ninvestigation into the allegations of insider trading in order to
\nmaintain the market's confidence.<\/p>\n
The sale marked the government's first privatization program
\nthis year, from which it expects to raise Rp 6.5 trillion to
\ncover the gaping state budget deficit.<\/p>\n
As for Indosat, the government plans to sell 45 percent of its
\nshares in the company this year, with the second phase of the
\nprocess, a strategic sale, expected to be completed in October.<\/p>\n
Following last week's private placement, the government now
\nowns 56.9 percent of Indosat.<\/p>\n
Indosat also plans a rights issue to help finance the $325
\nmillion buyout of Deutsche Telekom's 25 percent stake in its key
\nunit, PT Satelindo.<\/p>\n
The buyout will give Indosat full control of Satelindo, the
\ncountry's second largest mobile phone firm.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indosats-advisers-blamed-for-rumors-on-inside-trading-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}