House questions JSX on Super Indah dealings
JAKARTA (JP): The House of Representatives' Commission VII yesterday questioned the credibility of Jakarta Stock Exchange's (JSX) management in handling PT Super Indah Makmur's unusual share price movement.
"We have done something. We asked the company's management to make a statement and we took action based on the statement," JSX's president, Cyrill Nurhadi, told the commission's members in a hearing yesterday.
"It could happen and it happened that the price still went up after we released the company's statement and we just could not do more than that," Cyrill added.
Super Indah is a flexible plastic packaging company owned by PT Ria Citra Corporation.
Controversy on Super Indah share trade emerged again early this week when a company controlled by Johaness Kotjo, PT Van der Horst Teguh Sakti, a subsidiary of Singapore's Van der Horst Limited, announced it planned a tender to own up to 49 percent of the company.
Early this month, there was a takeover rumor involving Kotjo. The rumor boosted Super Indah share trade, causing a 78 percent increase in prices to Rp 2,450 (US$1.04) in a day's trade on June 3. Around 8.7 million shares changed hands.
Following the sharp price increase, the JSX suspended trade of Super Indah shares for the June 4 morning trading session. It later lifted the suspension for the afternoon session. Only thirty minutes after the JSX announced it would allow trading, Super Indah's management released a statement saying the price movement was out of their control.
Share prices rose after the suspension was lifted, a trend which was considered unusual by some stock analysts.
In the period from June 3 to June 7, Super Indah was recorded as the JSX's top gainer and having the second biggest turnover in transaction value and volume.
Its share price closed 136 points higher that week than the previous week's close. On June 7's close its price was Rp 3,250. Around 30 million shares had changed hands with a transaction value of Rp 90 billion.
"It doesn't make sense at all. If the rumor was wrong, the share price should go down after the announcement. What happened implied that the rumor would come true. But why didn't the company confirm the rumor," a senior trader told The Jakarta Post.
On Monday's close, the share price reached Rp 3,825 compared to Rp 1,375 at June's opening.
"We have to believe the company's management," Cyrill argued.
Speaking to journalists after yesterday's hearing, Cyrill defended the actions of the JSX.
He would not say if the JSX would take any action against the company.
Tender offer
Van der Horst Teguh Sakti said in the announcement, which has been confirmed by a JSX director, that it had signed a share purchase agreement with PT Topas Investindo, which owns 12.25 million Super Indah shares, or 35 percent of its total shares.
Van der Horst therefore proposed to buy another 14 percent, 4.9 million shares, through a tender offer to own up to 49 percent of Super Indah.
Super Indah shares' highest price in the past 90 days will determine the purchase price as stipulated by tender offer regulations.
Commenting on the tender offer, Cyrill said, "I think the company's management didn't know about the tender offer plan on June 4, when we asked them to clarify the rumor."
He denied that the JSX had made a mistake in lifting the suspension of Super Indah share trading.
He also denied speculation that the JSX had not received true information from Super Indah's management.
"The tender offer plan happened in the previous few days and not at the time we asked the company to clarify the rumor," he contended.
Cyrill, however, agreed with the House members' suggestion that the JSX should improve its supervision.
The JSX's decision to lift the Super Indah suspension came only a few days after the Capital Market Supervisory Agency (Bapepam) instructed the JSX management to improve its entire supervision system following the Bank Mashill case.
Bapepam considered the JSX's poor surveillance was a key factor which allowed several parties to trade Bank Mashill's shares on inside information, because the JSX didn't suspend the bank following a significant share price increase.
House member Markos Lubis urged the JSX management to enforce capital market law and to maintain investor confidence by taking proper action in any case such as Super Indah. (alo)