Lippo e-Net could face charges: Bapepam

Lippo e-Net could face charges: Bapepam

JAKARTA (JP): Head of Capital Market Supervisory Agency
(Bapepam) Herwidayatmo has said that listed life insurance
company PT Lippo e-Net may be charged with presenting
inconsistent information to the public.

"I see small indications where Lippo e-Net is inconsistent in
its statements to the public," Herwidayatmo told journalists at
his office on Sunday.

Herwidiyatmo did not reveal the inconsistencies but analysts
have said the statements made by Lippo e-Net in its news releases
contradict with those made by the company during a public expose.

Herwidayatmo added that further careful investigation was
necessary, however, as the case could possibly lead to
punishment.

The management of the Jakarta Stock Exchange (JSX) reported
last week to Bapepam that the insurance company had committed
wrongdoing by creating a misleading image that it had transformed
itself into an Internet company.

In mid-January, Lippo e-Net share prices doubled within a week
after the company released the alleged misleading information.

Herwidayatmo stressed that if the Lippo e-Net case was
connected with misleading information, meaning it was a criminal
case, Bapepam would refer it to the Attorney General's Office.

Law No. 8/1995 on capital markets clearly prohibits any party
from intentionally giving false or misleading information to the
public for any targeted purpose, including to artificially
influence share prices on the stock market.

"We are still conducting the investigation and evaluation of
whether there are indications of inconsistent statements, and
whether such inconsistencies amount to releasing misleading
information," said Herwidayatmo.

However, JSX president Mas Achmad Daniri doubted if the
company would be charged with releasing misleading information.

"I don't know yet whether it can be categorized as giving
misleading information," said Daniri during the meeting at
Herwidayatmo's office.

In the meeting, Herwidayatmo clarified a recent media report
which quoted Bapepam's audit report as saying that the agency
found irregularities that cost the stock exchange some Rp 26
billion (about US$3.5 million).

"There was no indication of corruption found in the audit. But
yes, there may be inefficiency," Herwidayatmo said.

Rumors have circulated that Bapepam's audit report on JSX was
leaked to the media by some parties who were unsatisfied by the
current JSX management's move to impose stricter rules in the
bourse.

But Herwidayatmo dismissed the rumors as baseless, adding that
the reshuffle of JSX management was not on the agenda for the JSX
shareholders meeting. (udi)