Bapepam suspects manipulation in BCA shares
Bapepam suspects manipulation in BCA shares
JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam)
said on Thursday it suspected that several securities companies
had collaborated in manipulating the price of PT Bank Central
Asia (BCA) shares through their trading deals in May and late
June, or prior to the bank's secondary public offering earlier
this month.
Bapepam chairman Herwidayatmo said preliminary investigation
found that 20 securities companies might have been involved in
the manipulation.
"We have found early indications of market manipulation to
lead the price of BCA shares to a certain level," Herwidayatmo
told reporters at a press meeting.
He said an analysis of BCA share-trading patterns, covering
both orders and transactions, was conducted on 172 securities
companies for the period from May 1 to July 13.
"The first indications can be seen during the period between
May 15 and June 12, when the bank's shares rose after the bank
had conducted a stock split on its shares," he said.
Herwidayatmo said that during this period a number of
securities companies had dominated BCA share purchases.
When BCA shares fell during the period from June 13 to June
29, the same securities companies dominated the selling of BCA
shares, he added.
"This is thought to have triggered the drop in BCA shares," a
Bapepam statement said.
Herwidayatmo said that as a follow-up to the findings, his
office would further investigate the suspected securities
companies.
He declined to reveal their names. Of the 20 companies, he
said, four have been examined.
According to him, it takes about three to four days to examine
one securities company. Herwidayatmo promised to conclude
Bapepam's investigation within 15 days from Thursday.
"If they (the securities companies) are guilty of
manipulation, they will be brought to court where they could face
a penalties of Rp 15 billion (about US$1.32 million) and jail
term of up to 10 years for those involved," he said, referring to
article 91 of the Law No 8/1995 on the capital markets.
BCA has come under the spotlight since the divestment process
of the government's 40 percent stake in the bank began.
The divestment of BCA is part of the government's agreement
with the International Monetary Funds (IMF).
Earlier this month, the government sold a 10 percent stake
through a secondary public offering at a price of Rp 900 a share.
The sale, however, prompted charges of insider trading leveled
against BCA's lead underwriter, the state owned PT Danareksa
Securities.
The secondary public offering was held from July 4 to July 6,
or close to the date when the securities companies unloaded their
BCA shares, driving down prices on June 29.
But so far, Bapepam's initial findings appear to remove the
suspicion of insider trading. It said that all information
pertaining to the second public offering had been widely
disclosed in the bank's prospectus.
Bapepam also found no indication of insider trading during the
sale of the other 30 percent stake in BCA through a private
placement.
It said that because the tender process had not been concluded
yet, no such indications could be established.
The government hopes to sell the 30 percent to a strategic
partner, but has thus far failed to ink a deal due to what many
believe are low bids.
BCA shares offered for private placement are pegged at a
premium to the stock market price, and the government said it had
extended the bidding period to get a better deal.(bkm)