JSX 'guilty of unfair business practices'

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.