Bapepam probes Semen Gresik case

Bapepam probes Semen Gresik case

JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam)
is currently investigating suspected insider trading of state-
owned cement maker PT Semen Gresik shares on the Jakarta Stock
Exchange (JSX).

Bapepam chairman Jusuf Anwar, who replaced I Putu Gde Ary Suta
on Monday, told journalists yesterday that the agency had set up
a team to investigate possible fraud in the local bourse.

"We have set up a team to thoroughly investigate suspected
insider trading of Semen Gresik stocks... Bapepam will not
tolerate any manipulative practices in the market," he said.

But he stopped short of naming any suspects, stressing the
importance of upholding the presumption of innocence.

"It is just too early for Bapepam to judge who is doing wrong
and who is doing right," he said, adding that the team would
require at least one month for the investigation.

Jusuf, however, said that the agency already summoned the
managements of the state-owned securities companies PT Bahana
Securities and PT Danareksa Sekuritas yesterday to explain their
role in the trading of Semen Gresik stock.

Bapepam has also asked representatives from PT Jardine Fleming
Nusantara to explain its involvement today, he said.

Bahana, Danareksa and Jardine Fleming are all inhouse advisers
for the privatization of Semen Gresik.

Jusuf urged investors and securities houses in the local
market to abide by existing regulations to improve the market's
flagging image.

"International investors are only interested in putting their
funds into a transparent and fair stock market," he said.

Former Bapepam chairman I Putu Gde Ary Suta said Monday that
he had suspected illegal transactions of Semen Gresik after its
stock prices surged over 50 percent since early May to June 18.

"This insider trading is the biggest scandal in the history of
our capital market," Putu said Monday.

Semen Gresik stock prices increased 64 percent to Rp 8,900 on
June 18 from Rp 5,450 on May 1.

Putu said Bapepam then looked into the three affiliated
securities firms, which turned out to be among the most active
traders of Semen Gresik during the period.

In addition to the three firms, Putu said Bapepam was also
investigating three other securities houses which also actively
traded Semen Gresik shares. They are PT Bhakti Investama, PT ING
Barings Indonesia and PT Indosuez WICarr Indonesia.

Stock analysts said the securities houses possibly benefited
from their inside information that several foreign investors
would purchase part of the government's 65 percent stake in Semen
Gresik.

Two international cement producers, Switzerland's Holderbank
Financiere Glarus and Mexico's Cemex CA, submitted bids for part
of the government's stake in Semen Gresik on June 17.

It is suspected that parties benefited from trading stocks in
the publicly listed company based on the information which had
not yet been made public.

Parties with such insider information could include directors,
officers or key employees and relatives with access to company
decisions.

Article 104 of the 1995 Capital Market Law states that people
convicted of insider trading could be sentenced to a maximum of
10 years in jail and be fined a maximum of Rp 15 billion (US$1.07
million). (aly)