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)