JSX to elect new board of directors today

JAKARTA (JP): The Jakarta Stock Exchange (JSX) is scheduled to elect new boards of directors and commissioners today despite continuing debates on the new nomination and election procedures.

The issue about the exchange's autonomy emerged when JSX's current president, Hasan Zein Mahmud, who was elected only in March last year, protested the government's instruction to hold an early election for the directors of the JSX.

On Jan. 11, the Capital Market Supervisory Agency (Bapepam) issued a regulation on the new procedures for nominating the exchange's boards of directors and commissioners.

According to the new procedures, candidates shall be nominated in a package and not as individuals.

One month later, on Feb. 16, Bapepam instructed the JSX to hold a shareholders meeting to hold an early election of the boards of directors and commissioners, even though the current directors had served only one year of their three-year term.

"To ascertain that the JSX's management meet the procedures, there should be an early election as a consequence of the new capital market law," argued Bapepam's chairman, I Putu Gede Ary Suta.

However, Hasan contended that he saw no logical sequence in the new capital market law, Bapepam's regulation and instruction on the early election of management and supervisors for the JSX.

To be make a point, Hasan then stepped down and refused to be nominated for today's election.

"I think there should be a system in which everybody knows his position. And the most important thing is the consistency to play on the basis of the system," said Tito Sulistio, a director of PT Citra Marga, a private-sector toll road developer.

"In this case, I respect Hasan Zein for his consistency," Tito announced last week.

Questions on the exchange's autonomy also emerged because candidates for the election have to be approved by Bapepam.

Rumors among market players last week said that some candidates had been summoned by the minister of finance.

Ignasius Yonan from PT Sigma Batara said that the new procedures will probably allow certain companies to influence the elected boards to support their interests.

So far, it is only the state-owned PT Danareksa which has openly admitted that it sponsors the nomination of the package of candidates comprising Cyrill Noerhadi, Felia Salim, Mas Akhmad Daniri and Edwin Stambul.

Danareksa's president, Agus Projosasmita, announced last week that his company's candidates were supported by the state-owned PT Bahana Securities, PT BZW Niaga Securities and PT Pentasena.

The sponsors of the two other nominated teams of directors which are headed by Mohamad Latuconsina and Yannes Naibaho, were, however, not known at the time.

Yet each team claims the support of several securities companies.

Only one package of candidates has the approval of Bapepam for the board of commissioners. It is led by Director General of Taxes Fuad Bawazier and consists of Rosano Barrack, Titik Prabowo, Ry Ryana Hardjapamekas and Rini M. Soewandhi.

Motivation

The history of the JSX as a private institution dates back to the end of 1991, when the Ministry of Justice granted a license to the JSX to become a limited liability company.

In early 1992, JSX's shareholders elected the directors and commissioners for the first time.

The election itself was aimed to enforce the new status of JSX as a private institution even though the candidates were selected by the finance minister.

The second election was conducted last year and the finance minister was still directly involved in selecting the candidates.

Last year's election, which was marred by personal confrontation among the candidates, almost ended in a deadlock. The shareholders meeting ended at 2 a.m., 12 hours after the original schedule of closure.

A securities executive who asked for anonymity told the Post that last year's election raised questions as to the real motive that had prompted the candidates to go all-out for the management positions.

The government's key directive when it privatized the exchange was to increase efficiency, transparency and liquidity in order to protect the investing public.(08)