Kalla urges capital market authorities to boost supervision
Kalla urges capital market authorities to boost supervision
Rendi A. Witular and Urip Hudiono, The Jakarta Post, Jakarta
Improvements in law enforcement and legal certainty in the
country's capital market are the keys to maintaining investors'
trust.
If officials from the Capital Market Supervisory Agency
(Bapepam) and other related authorities such as the Jakarta Stock
Exchange (JSX) did not perform to meet public expectations, then
investors' trust would decline, according to Vice President Jusuf
Kalla.
"People buy hope when investing their money in the capital
market, based on trust and values on the equities that they
invest in. If this hope is tarnished then there will no longer be
any trust," he said before capital market players on Wednesday.
His remark was delivered during the 2004 Annual Report Award
ceremony -- jointly organized by the JSX, Bapepam, the Ministry
of Finance and the Office of State Minister of State Enterprises.
Some analysts say that capital market authorities are
generally tough on small firms and those without connections. On
the other hand, they are lenient towards large and well-connected
firms. This, they say, creates the impression that Bapepam
officials colludes with larger companies.
This could clearly be seen when both the JSX and Bapepam
dropped their plan last year to delist construction and
engineering company PT Bukaka Teknik Utama, which is linked to
the Kalla family, claiming that the company still complies with
capital market regulations.
Both authorities decided to extend the company's listing to
give some time for it to undergo restructuring, even though its
shares have been suspended for more than two years following a
"disclaimer" opinion given by the company's auditor Ernst & Young
on its financial performance for five consecutive years.
During the ceremony, Kalla also emphasized the need for public
accountants and capital market analysts to prevent corrupt
practices by colluding with a troubled company to manipulate its
financial report and get away with investors' money.
"Bapepam, public accountants and analysts should clearly
uphold their professionalism. Don't collude with a company to
mark up its financial report. You can escape untraced for two
years, but not in the third year," he said.
If manipulation remained rampant in the capital market, Kalla
said he feared it might eventually disrupt economic growth as
investors would loose their trust in the market and the corporate
sector.
"The ethics of a company are not merely to seek profit. They
should look forward by focusing on the growth of its labor force,
business, capacity and most importantly trust from its
shareholders and partners," he said.
On the sidelines of the award ceremony, JSX president director
Erry Firmanysah said as of July this year, 55 percent of trading
activities on the bourse were still dominated by foreign
investors and securities houses.
At present, the average value of trading activities in the JSX
reached some Rp 2 trillion (US$204 million), with a total
capitalization of about Rp 810 trillion.
Recipients of the 2004 Annual Report Awards
Grand award category:
Medco Energi International (oil and gas)
Publicly listed non-financial state-owned enterprise category:
Aneka Tambang (mining)
Adhi Karya (construction)
Indosat (telecommunications)
Publicly listed non-financial private firm category:
Medco Energi International (oil and gas)
Astra International (automotive)
Bakrie Sumatra Plantation (plantation)
Publicly listed financial state-owned enterprise category:
PT Bank Rakyat Indonesia (banking)
PT Bank Negara Indonesia (banking)
Bank Mandiri (banking)
Publicly listed private financial firm category:
Bank Niaga (banking)
Bank Bumiputera Indonesia (banking)
Bank Central Asia (banking)