JSX 'guilty of unfair business practices'

The Jakarta Post, Jakarta

The Business Competition Supervisory Commission (KPPU) ruled on Friday that bourse management firm the Jakarta Stock Exchange (JSX) was guilty of having constituted a potential monopoly in its offering of the stock market's electronic reporting system project two years ago.

No administrative sanctions or penalties were imposed on JSX, but the company was ordered to terminate its contract for the project with information technology firm PT Limas Stokhomindo, within 30 days after accepting the commission's ruling.

KPPU's somewhat "light sentence" for the case came as JSX had already canceled the contract in February, following a similar demand -- on similar grounds -- from the Capital Market Supervisory Agency (Bapepam).

The commission's ruling was handed down after its panel for the case -- Pande Raja Silalahi, Sutrisno Iwantono and Bambang Purnomo Adiwiyoto -- spent four months, since February, examining 125 documents and questioning five witnesses, as well as hearing the testimonies from both JSX and Limas.

KPPU official Pande Radja Silalahi said that JSX's decision to directly appoint Limas without an open bidding process to implement its electronic reporting system had violated Law No. 5/1999 on the prohibition of monopolies and unfair business competition.

"JSX was found guilty of breaching Article 19 of the law, for the discriminatory treatment in favor of certain business units," he said.

Pande added that the commission had decided to investigate the case after acknowledging reports in the media about possible irregularities in the implementation of the electronic reporting and monitoring system.

Many of the bourse's listed companies had complained to JSX in August last year when Limas started asking for fees for the reporting service, even though the service was then only being tested under a trial period.

The contract for the project was signed between JSX and Limas in June 2003. There are currently 331 companies listed at the bourse and 72 securities houses that are members of the JSX.

Upon learning the case, Bapepam then ordered JSX to cancel the agreement altogether, which was followed shortly by KPPU's investigation.

Nevertheless, all parties agreed that an electronic reporting and monitoring system would be useful in improving the efficiency of the bourse' operations.

Prior to such a system, communication between JSX and its listed companies was done manually, in which the companies would send their public financial reports by mail and facsimile, with JSX then scanning the documents into a proper format before uploading them on to their website at http://www.jsx.co.id .

Commenting on the ruling, JSX director for trading and membership MS Sembiring said that the company would accept the KPPU's decision, adding that JSX would, in the future, hold an open bidding for all of its projects.