Lippo e-Net investigated over 'misleading information'

JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam) is investigating whether listed firm PT Lippo e-Net presented misleading information to the public, an agency official said.

"We are studying all the statements and public announcements made by Lippo e-Net. We will soon ask the company to provide the supporting facts of such statements and announcements," head of the agency's company financial assessment bureau Freddy Saragih said on Tuesday.

Lippo e-Net share prices doubled within a week in mid-January after the company made a public announcement that it had transformed itself from an insurance firm into an Internet company and planned an immediate allocation of Rp 1 trillion for the business.

The stated fund allocation has not been realized.

Anticipating possible market manipulation by the firm, the management of the Jakarta Stock Exchange (JSX) quickly conducted a special investigation into the company.

In early April JSX officially sent an investigative report on the insurance company to Bapepam. JSX said it found some inconsistencies in the statements made by Lippo e-Net.

A particular issue is the company's stated Rp 1 trillion investment plan.

Equity analysts said the inconsistency in statements gave a strong indication of the provision of misleading information.

Dandossi Matram from Bakrie Securities said earlier the act of releasing inconsistent statements also meant "giving misleading information".

"It is obvious that the two phrases have the same meaning, with only the former one being a softer way of saying it."

Law No. 8/1995 on capital markets 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.

Violators would be liable to maximum sentences of 10 years in jail and a Rp 15 billion fine.

Freddy said Lippo e-Net would have to provide evidence to Bapepam that the company was serious in entering the Internet business.

He said Bapepam received evidence in the form of Lippo e-Net's minutes of meeting which showed that some years ago the company was interested in the Internet business.

However, Freddy declined to answer reporters' queries whether Bapepam received evidence supporting Lippo e-Net's Rp 1 trillion Internet investment plan.

"Please wait for our final investigative report," he said, leaving quickly.

PT Lippo e-Net underwent a name change from PT Lippo Life in late January. (udi)