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)