Bapepam says it needs more time to complete Lippo probe
Dadan Wijaksana, The Jakarta Post, Jakarta
The financial authorities will be unable to complete their investigation into the Bank Lippo affair by the Monday deadline they have set themselves, a senior official has admitted.
Capital Market Supervisory Agency (Bapepam) chairman Herwidayatmo said on Friday that what would be unveiled to the public on Monday was the progress achieved so far in the investigations being carried out separately by the agency, Bank Indonesia and the Ministry of Finance.
"The announcement on March 17 will feature clarifications from the relevant institutions, such as Bank Indonesia, Bapepam and the Ministry of Finance, as to what stage they had reached in their probes into the Lippo case," he explained.
Previously, Bapepam said that it would announce the results of its investigation on March 17.
The agency has been investigating possible wrongdoing by the management of Bank Lippo when it published two different third quarter financial reports late last year. The reports have mislead the public, analysts say, causing the bank's share price to fall.
There has been suspicion that the bank's management had deliberately attempted to bring the share price down to allow its former owners, the members of the Riady family, to regain control of the bank at a very low price. Bank Lippo has been 59 percent owned by the government since an expensive bailout in the late 1990s.
Bank Indonesia, the central bank, has been investigating whether the bank's management and commissioners had violated banking regulations, while the Directorate General of Financial Institutions at the finance ministry has been probing the bank's auditor and appraisal firms linked to the financial reports.
As public demands rise for the authorities to sanction the bank's management and board of commissioners for alleged fraud intended to destroy Bank Lippo's capital base and share price, Herwidayatmo's remarks could be seen as a potential stumbling block to such action.
And as the relevant state agencies have been under heavy pressure to deal with the case, this might well serve as a justification not to impose tough sanctions on the perpetrators.
Earlier, hopes were high that it would be judgment day on March 17 and that those involved in the Lippo affair would face severe punishment for causing losses to the state.
Herwidayatmo argued that Bapepam needed more time because it might widen the scope of its probe beyond the dual financial reports into other areas, such as possible share price manipulation and unreported share transactions.
Reports earlier said that a number of stock traders working on behalf of the former owners of Bank Lippo were involved in trading manipulation to push the bank's shares down.
PT Lippo E-Net, a company owned by the Riadys, had also been accused of quietly amassing the bank's shares via the stock market at very low prices without reporting the transactions to the market authority as required by law. This company now owns about 12 percent of Bank Lippo shares, up from 8.1 percent previously.
Any such moves would be illegal as, according to capital market regulations, an investor owning a minimum of 5 percent of a publicly listed company who wishes to increase its ownership has to notify the capital market watchdog.
A group of analysts and anticorruption crusaders had previously asked Bapepam to widen the scope of the investigation.
"As for Bapepam, we're investigating the dual reports as part of one package together with possible manipulation (involving share transactions). But whether all will be announced at the same time (on March 17) remains to be seen as the probes are still underway," Herwidayatmo said.