Bapepam urged to be more independent

Bapepam urged to be more independent

JAKARTA (JP): Senior economist Sjahrir urged the government on
Monday to make the Capital Market Supervisory Agency (Bapepam)
more independent.

He said that without independence, the capital market watchdog
would not be able to come up with appropriate and quick decisions
when dealing with capital market problem such as stock trade
fraud.

Sjahrir, the managing director of the Institute for Economic
and Financial Research (ECFIN), said Bapepam, which is at present
overseen by the Ministry of Finance, was often seen as too slow
in dealing with certain cases because it had to first consult
with the ministry when making a decision.

He said that such a bureaucratic hurdle should be removed
because it was no longer relevant to the rapid change in the
country's financial activities.

"It is now time to have a total reform of the country's stock
market," he said after the launch of the latest edition of the
Indonesian capital market directory published by ECFIN.

Sjahrir said Bapepam's slow response could be seen from its
reaction to allegations of insider trading of Semen Gresik shares
recently.

"Bepepam could not probe the case thoroughly due to
interference from the Ministry of Finance," he said.

The country's stock market was rocked by illegal trading of
Semen Gresik shares in June this year following a sharp increase
in its stock price on the Jakarta Stock Exchange.

Former Bapepam chief I Putu Gede Ary Suta has alleged there
was an insider trading scam at the time Semen Gresik's shares
soared.

Bapepam set up an investigation team to probe the case but it
has not announced any results yet.

Other analysts said that the stock scam in the local market
could not be resolved fully because it involved senior officials
at the Ministry of Finance.

Separating Bapepam from the ministry would be the only way to
eliminate such intervention, Sjahrir said.

He also criticized the Jakarta Stock Exchange management for
its failure to meet the needs of securities houses operating in
the bourse even though the former had so many employees.

"The JSX management has to be reformed... if possible we can
appoint new directors who can meet our demands," he said.

He said that the JSX employed about 400 employees compared to
around 250 early this year.

He said the JSX management should cut the number of employees
as a cost-cutting measure to cope with the crisis. (aly)