Investors association a must

Investors association a must

More than 6,000 people invested a total of at least Rp 500
billion (US$55,5 million) into an agribusiness firm controlled by
private firm PT Qurnia Subur Alam Raya (PT QSAR) which promised
good dividends. The company recently collapsed and its president
escaped leaving investors completely dazed at their loss. The
following are excerpts from an interview on the issue between
Indonesian Consumers Foundation (YLKI) chairperson Indah
Suksmaningsih and The Jakarta Post's Soeryo Winoto.

Question: As a consumer advocacy activist how do you see the
case involving the Sukabumi, West Java-based PT QSAR?

Answer: The investors are not really consumers. To become
investors is their choice to increase their money. Frankly YLKI
isn't deeply concerned with the case.

On Jan. 15 this year I was invited by an agribusiness
community to speak at a forum titled Indonesia's Self Funding
Agribusiness in Jakarta. I told the audience -- some of them
investors -- that share investing is a gamble that can be
profitable and knowing how to play the game enables them to
protect their money. I had said investors should know how to
protect themselves in this kind of business.

Q: Is it legally right for PT QSAR to collect public money by
promising the prospective investors high profits, which sounds
irrational?

A: So far there is no law which regulates such fund raising.
However, Article 4C of the Consumer Law could be applied to curb
such practices. The article says that advertisements must be
clear and honest. Worse, our legal instruments have usually not
involved small investments (in the PT QSAR case). Should the case
be brought to court it will take a very long time.

Q: Does the case reflect the government's carelessness in protecting
consumers?

A: We are aware of the working pattern of government officials.
They always focus on business law, not contract law. In the
credit card business, for example, the government is only
concerned about the providers' readiness; its head office,
investment or working capital and who is behind the business. But
when it comes to the relations between the providers and the
consumers the government always keeps its hands off. Therefore
all parties involved in such a business must be extra careful.

Q: How should the government protect people from "pseudo"
businesses?

A: The government should have been involved in the making of the
contract between producers and consumers (investors in the PT
QSAR issue). In this way the government could protect consumers
should the contract be unfair, favoring the producers.

The PT QSAR case is a collective problem, not individual. Thus
an investors' association is essential. The association should
equip itself with adequate data based on all kinds of businesses
the public can invest in. The association should also list the
businesses based on its rating of them.

Agribusiness is a high risk investment because it mostly
depends on nature, besides proper technology and good management.
By establishing an association, consumers could prepare
everything, including a solution in case of any dispute.
Investing money in companies is a business based on mutual trust.
Accountability of the two parties is a prerequisite.

Q: People tend to seek shortcuts to get as much money as possible
while banks, which offer small interest rates, are no longer
considered lucrative. Does the PT QSAR case reflect the people's
frustration and irrationality?

A: Exactly. The government has led people to be frustrated by,
among other things, the imposition of various taxes from
electricity to toll roads. The government seems to rely on the
taxes as its sole financial source. The government has failed to
manage state-run companies (BUMN) properly. The companies should
have contributed to the government's financial sources.

Q: We have heard several similar cases affecting the people before.
What can YLKI really do to protect the people from further
malpractice?

A: Our priority is public cases, while what happened with PT QSAR
is an individual matter. Once again, PT QSAR investors are not
consumers. Thus, an investors' association must be established to
protect them. They could also hire lawyers to help them.