JSX being audited after reports of breaches

JSX being audited after reports of breaches

JAKARTA (JP): The board of commissioners of the Jakarta Stock
Exchange (JSX) has appointed Earnst & Young Consulting to carry
out an investigative audit on the JSX management following
reports of alleged breaches in the exchange.

"The scope of work covers the 12 findings of inefficiency and
possible breaches, the information technology area and JSX role
in the exchange's trading surveillance," member of the boards of
commissioner Erry Riyana Hardjapamekas said on Wednesday.

Erry said Earnst & Young, who charged a US$25,000 fee for the
job, started the auditing work on Wednesday.

The Capital Market Supervisory Agency (Bapepam), in its
operational audit report leaked to the media last week, said it
found 12 cases of inefficiency and breaches of operating
procedures by the management of JSX.

The annual shareholders' meeting held on Monday approved the
commission's proposal to hire an independent auditor to follow up
the above 12 findings.

The meeting also agreed to install a five-member team,
representing shareholders' interests, to closely assist the work
of the independent auditor throughout its three-week auditing
process.

The idea of the five-member team was proposed by Syahrir, a
prominent economist representing PT Syahrir Securities, who is
also member of JSX shareholders, .

Some equity analysts saw the investigative audit as part of a
bigger conspiracy by certain parties to get rid of the current
JSX management team who have been imposing strict rules on the
bourse.

"This is hard-core politics. There are many parties who are
unpleasant with the strict JSX rules and want to make a move,"
senior equity analyst Martin P.H. Panggabean said

"JSX is the country's most "reformist" public institution.
This is why the current management got all these disturbances,"
he said.

Martin said the independent auditor should find out if the 12
findings by Bapepam were merely "honest" mistakes by JSX
management which might have been committed without any bad faith.

M.S. Sembiring, from Mitra Investdana Sekurindo, played down
the existence of any conspiracy, saying that there were pluses
and of course minuses about the performance of the current
management of JSX.

"The current management of JSX has to be responsible if the
minuses are beyond toleration," he said.

He said that there were significant projects carried out by
the management that had not passed proper approval procedures
through the commissioners or Bapepam.

Meanwhile, Intan Abdams, the JSX corporate communications
division head, clarified media reports that said there were over
20 listed firms implicated in possible wrongdoing.

"It is our trading system that automatically halts the trading
of any shares whose price fluctuates more than 30 percent within
a day," she said adding that in such occurrences a regular and
standard investigation takes place.

"It is a very normal procedure, nothing special. The system is
implemented to improve market surveillance and to get rid of any
unusual trading activity on the market," she said. (udi)