Bapepam investigates four investment firms

The Jakarta Post, Jakarta

Following sudden and massive redemptions in mutual funds earlier in the month, the Capital Market Supervisory Agency (Bapepam) is putting four investment management firms under investigation for possible wrongdoing.

Freddy Saragih, Bapepam bureau head for investment and research, said on Tuesday the investigation would be conducted to take a close look at the events and to reveal what actually happened during "big runs".

The four investment firms concerned are Mandiri Securities, Bahana Securities, BNI Securities and Trimegah Securities.

"The accusations are: first, fraud may have occurred. If the firms are proven to have carried out `mis-sellings', or using their investors' fund for something not in line with what they have been told to do as stated in their prospectus," he said, after a launch of a protected mutual fund.

"Second, they may have manipulated some key information to their investors."

Bapepam data shows that total asset value in the mutual funds industry dropped to Rp 35.73 trillion in Sept.14 from Rp 110.78 trillion in the end of February, with about Rp 40 trillion worth of funds being redeemed in early September alone.

Freddy said his agency would send questionnaires to several selling agents and investors related to the four companies, to find out what the fund managers in those companies were doing during the early days in September.

"During the investigation, we will also look at their investment portfolios to find out whether they violated our regulations in relation to minimum and maximum percentage of investments in one instrument (of investment)," he said.

But Freddy declined to disclose the names of selling agents that Bapepam would investigate.

"We will disclose our investigation results in detail when the time comes," he said, declining to name any specific timetable for the completion of the probe. (006)