Danareksa under Bapepam scrutiny in BCA case

JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam) confirmed on Monday it was investigating state-owned securities firm PT Danareksa Sekuritas for suspected involvement in the manipulation of the Bank Central Asia (BCA) share price.

Bapepam chairman Herwidayatmo said the agency was looking into all securities firms it believed could have played a role in the case.

Asked whether they included Danareksa, Herwidayatmo said yes.

"We won't shy away from investigating everyone," he told The Jakarta Post.

Bapepam is investigating 15 securities firms and 14 investors over suspicion of having manipulated trading in BCA shares.

Except for Danareksa, no other names had been disclosed.

The BCA case centers around sharp fluctuations in the bank's share price between May and July, which Bapepam suspects was caused by manipulation.

The share price rose sharply on news that BCA had attracted several foreign investors to bid for a stake in it under the government's divestment plan.

The government, which is the majority owner of BCA, plans to sell of 30 percent of its stake in the bank later this year.

Another 10 percent was sold through a secondary public offering between July 4 and July 6.

Shortly before the public offering, BCA share prices plunged to about the same price level the government had set for the offering.

Some analysts suspected insider trading, with BCA's secondary offering price leaked to a number of brokerages.

"The crux of the question is who benefited the most from these transactions," Herwidayatmo said.

Bapepam identified several brokerages that dominated both purchases and sales of BCA shares during the periods when prices fluctuated most markedly.

Based on trading data compiled by Bloomberg, Danareksa is seen as the most active trader during the periods Bapepam suspected manipulation to have taken place.

The state-owned brokerage was also the lead underwriter for the sale of BCA's stake through the secondary public offering.

Rumors of insider trading implicating Danareksa officials abound, as the brokerage helped determine BCA's secondary offering price.

Danareksa president Dian Wiryawan denied his company's involvement, saying it had passed an audit by independent consultant Ernst & Young.

"We're clean, they've audited us and found nothing suspicious," he told The Post without elaborating.

But Herwidayatmo dismissed Dian's denial as premature.

"Their (Danareksa's) audit is none of our concern. We are proceeding with our own internal audit, and if it matches theirs, good for them," he said.(bkm)