Bapepam punishes investors, brokerages over share scam
JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam) finally handed down yesterday penalties to investors, brokerage houses and the Jakarta Stock Exchange (JSX) management over the cornering of Bank Pikko shares early last month.
The head of the agency's legal bureau, I Nyoman Tjager, said the agency had obliged Benny Tjokrosaputro and Pendi Tjandra to hand over the profits they made cornering Pikko shares, Rp 1 billion (US$411,520) and Rp 500 million respectively, to the state treasury within 14 days.
The agency also demanded Pendi Tjandra quit his position as a director of PT Multi Prakarsa Investama Securities.
Bapepam also fined Multi Prakarsa and PT Putra Saridaya Persada (PSP) Securities Rp 150 million each for their roles in helping corner Pikko shares. They have 90 days to transfer the money to the state treasury.
The two securities firms were also required to improve their internal control and bookkeeping. The bookkeeping must be audited by public accountants and reported to the agency within 90 days.
The agency ordered JSX's management to improve the exchange's market surveillance system, the JSX's self-regulations and take quick and necessary measures against securities houses that break regulations.
Punishment
The agency handed down the penalties after a one-month investigation into the Pikko case which broke on April 8 when the price of Bank Pikko shares skyrocketed abnormally by 207 percent.
Tjager said Bank Pikko shares were cornered. The sharp rise was engineered by Benny, with the help of Pendi Tjandra and the two securities houses.
They took advantage of the stock exchange's poor trading surveillance.
He said Pendi Tjandra was involved in manipulating the trading of Pikko shares by splitting buying and selling orders through eight security houses to look as if the shares were actively traded.
Meanwhile, Benny used at least 13 nominees to help engineer a seemingly active trading of Pikko shares.
"These actions directly and indirectly mislead other parties into active transactions in Pikko shares," Tjager said.
Many short-sale investors posted big losses when Bank Pikko's share price rocketed as a result of the market cornering. They were not aware that most of the shares were being controlled by a single investor, and they sold short.
Selling short is when an investor sells a stock he does not own, believing he will be able to buy it back later at a lower price, thus profiting from the difference.
But it turned out Bank Pikko shares did not go down as short sellers expected but kept rising until they were suspended later in the day.
Because of short selling, 52 of the 127 securities houses that traded Pikko shares on April 8 failed to deliver shares to buyers.
The agency also sent warnings yesterday to another 54 securities firms involved in the trading.
They include PT Argaartha Securitas, PT Artha Securities Prima, PT Bahana Securities, PT Bakrie Securities, PT Bhakti Investama, PT Bina Artha Parama, PT Danamon Securities, PT Danareksa Securities, PT Lippo Securities, PT Mashill Jaya Securities, PT Pentasena Arthasentosa, PT Peregrine Sewu Securities and PT Sassoon Securities Indonesia. (rid)