Bapepam investigates four investment firms

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)