Fresh ruling on JSX management surprises many
Fresh ruling on JSX management surprises many
JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam) has revised its regulation on the nomination of the Jakarta Stock Exchange (JSX)'s management by reducing the number of directors and commissioners from six each to four and five, respectively.
"Based on the new capital market law and the JSX's operational needs, JSX needs only four directors and five commissioners," the agency said in a statement sent to the JSX's shareholders on Wednesday.
The agency's statement, according to several executives of securities companies registered on the JSX, did not clearly explain the reasons for revising its Feb. 16 directive that required the appointment of six executives each to the boards of directors and commissioners.
"It surprises us. We don't understand why the decision was made only two days before the deadline of the nomination," Sjahrir, a noted economist and director of a securities company, told The Jakarta Post.
Sjahrir said that Bapepam must have been aware of the approaching deadline, but made the changes anyway.
"I'm not sure whether the agency was pressured by the finance minister," he said.
"It's not easy to force a candidate who has been nominated in a package to step out. That is the adverse impact of the revision," he noted.
"I think there are certain parties with vested interests behind Bapepam's move," a director of PT Sigma Batara, Ignasius Yonan, told the Post.
One of the 83 regulations issued by Bapepam on Jan. 17 introduced the new procedures for nominating directors and commissioners for the domestic stock exchanges in Jakarta and Surabaya.
One of the rulings stipulates that director and commissioner candidates must be nominated by a minimum of three active exchange members with a combined trading value and trading frequency of at least 4 percent of total transactions on the exchange within the last 12 months.
On Feb. 16, Bapepam instructed the JSX to hold a general shareholders meeting on April 15 to elect a new board of directors and commissioners.
Bapepam also required JSX members to submit their candidates in two packages of six directors and six commissioners, which means that the shareholders will not elect individual candidates, but rather teams of candidates.
According to the instruction, JSX shareholders should have submitted their candidates to JSX's board of commissioners on March 22, and to Bapepam on March 25, for approval.
An source at the agency said that the new instruction was designed to improve the efficiency of the JSX because the smaller number of directors and commissioners will reduce costs.
But he declined to explain why Bapepam had required six directors and commissioners in the previous instruction if such a setup was considered inefficient. (08)