Mon, 17 Apr 2000

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)