Prosecutors probe alleged Bapepam irregularities<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Prosecutors are investigating officials at the capital market
\nwatchdog over \"lenient\" punishments imposed by the agency on some
\ncompanies found to have committed serious market violations.<\/p>\n
The acting chairman of the Capital Market Supervisory Agency
\n(Bapepam), Darmin Nasution, said the Attorney General's Office
\n(AGO) had summoned a number of officials from the agency for
\nquestioning over several past cases handled by the agency.<\/p>\n
\"The AGO has questioned why the officials gave offenders
\nlenient penalties for violations that could have been followed up
\nwith litigation,\" Darmin said recently at the Jakarta Stock
\nExchange.<\/p>\n
Darmin refused to elaborate, suggesting any questions be
\ndirected to Bapepam's head of inspection and investigation,
\nAbraham Bastari, who is aware of the investigation by the
\nAttorney General's Office.<\/p>\n
When contacted, however, Abraham, said he was unaware of any
\ninvestigation by the Attorney General's Office.<\/p>\n
\"We usually coordinate and discuss with the AGO on cases. I do
\nnot know if they are investigating us .... I don't even remember
\nthe last time we met with AGO officials,\" Abraham said.<\/p>\n
Abraham's unit is responsible for investigating suspected
\ncapital market violations, and to report to the Bapepam chairman
\nany violations that could be considered criminal in nature and
\nthus taken to the courts.<\/p>\n
A source at Bapepam said the Attorney General's Office was
\nfocusing on cases handled by the agency's former chairman,
\nHerwidayatmo, who was recently appointed an executive director at
\nthe World Bank for Southeast Asia.<\/p>\n
Herwidayatmo, who was named a suspect in a corruption case
\ninvolving the privatization of the Jakarta International
\nContainer Terminal, along with former state minister for state
\nenterprises Tanri Abeng, was replaced as Bapepam chairman by
\nDarmin in November this year. He had been in the position since
\n2000.<\/p>\n
The source said that among the cases being reviewed by the
\nAttorney General's Office was a 2003 case involving Bank Lippo
\nand a 2004 case involving state-owned pharmaceutical firm PT
\nIndofarma.<\/p>\n
Bapepam was criticized last year after it concluded that
\nviolations committed by Bank Lippo were not criminal in element,
\ndespite evidence that Bank Lippo's management misled the public
\nin claiming an unaudited financial report had been audited.<\/p>\n
The agency imposed a Rp 2.5 billion (US$280,000) fine on the
\nbank's management.<\/p>\n
Bapepam also was criticized for doing nothing more than fining
\nIndofarma Rp 28.9 billion for overstating its 2001 assets, sales
\nand net profit, in a bid to increase the price of the company's
\nshares.<\/p>\n
Analysts say the fact that only one market violation was taken
\nto the Attorney General's Office by Bapepam in 2004 indicates the
\nagency's lack of enthusiasm for enforcing the law.<\/p>\n
In its year-end report, the agency said that in 2004 it
\nimposed a total of Rp 11.03 billion in fines on 314 listed
\ncompanies, 47 securities houses, four custodian banks, 12
\nsecurities administration firms, two assessing firms and six
\ndirectors and commissioners.<\/p>\n
Some analysts say the agency is generally tough on small firms
\nand firms that do not have any connections, and is lenient toward
\nlarge and well-connected firms. This, they say, creates the
\nimpression that Bapepam officials collude with larger companies.<\/p>",
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