JSX to elect new board of directors today

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)