Bapepam denies rumored conflict with JSX head
Bapepam denies rumored conflict with JSX head
JAKARTA (JP): The Indonesian Capital Market Supervisory Agency (Bapepam) said yesterday that the agency's instruction to the Jakarta Stock Exchange (JSX) to elect its directors is aiming at enforcing the new capital market law.
"There was no conflict between the agency and the JSX's management," Bapepam's chairman, I Putu Gede Ary Suta, told the House of Representatives' Commission VII, in reference to the controversy caused by the instruction.
A House member, Markos Lubis, asked whether Bapepam and the JSX were involved in a serious conflict, raising questions about the resignation of JSX president Hasan Zein Mahmud.
Hasan said on Tuesday that he is not be willing to be reelected by JSX members as the next president at the forthcoming shareholders meeting.
Putu did not clearly explain the reason for the urgency of the election since the current board of directors was elected only last year.
But he noted that the new law gives Bapepam the authority to determine the procedures for electing stock exchanges' directors and commissioners.
Bapepam's regulation states that directors of stock exchanges must be nominated by a minimum of three securities companies with a combined trading value and frequency of four percent of the total in the last twelve months.
Unlike before, the new rulings require the candidates to be nominated as a team, not as individuals.
The regulation also stipulates that only exchange members with a total trading value and frequency of 0.20 percent of the total are allowed to nominate new directors.
"To ensure that the directors fulfill Bapepam's requirements they have to be elected again under the new procedures we have set up," Putu said.
"We also have to boost market performance. That is only possible if we have a healthy stock exchange," Putu said.
A healthy stock exchange, as Putu defines it, is one which is supported fully by its shareholders.
The president of the Surabaya Stock Exchange, Basjiruddin A. Sarida shared Putu's view, stressing that there must be some changes in the stock exchanges to conform with the new law.
On Hasan's resignation, Basjiruddin said "Any change claims victims. But the important thing is that this change will benefit the market."
The president of PT HG Asia, Eugene Galbraith, said that his clients abroad asked him yesterday what was going on at the JSX, in view of Hasan's refusal to be re-elected.
"We told our clients that there was nothing wrong with the current management, so our business was not affected," Eugene told The Jakarta Post in Bahasa Indonesia.
"I think the answer to the ongoing controversy will be revealed at the shareholders meeting on April 15. Then we will also see whether the market is affected or not," he said.
Eugene declined to comment on Bapepam's argument that the election of JSX's new directors is an interpretation of the new capital market law.
"I need to study it first," he said.
He added that the main concern of foreign securities firms is whether the new procedures for nominating the directors stipulated by Bapepam, notably the system of nominating a fixed package of candidates, are the most effective.
"I am not sure we'll be able to elect a qualified management team in this way. We won't be selecting individuals but a team. There is no guarantee that good teamwork translates into competent individuals making sound decisions," he pointed out.(08)