Bapepam punishes investors, brokerages over share scam
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)