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)