Mon, 10 Apr 2000

Lippo e-Net probed for allegedly misleading public

JAKARTA (JP): Listed life insurance company PT Lippo e-Net has presented misleading information to the public to give a false image of the company, an informed source has said.

The source said the Jakarta Stock Exchange (JSX) had sent a report on the insurance company's alleged wrongdoing to the Capital Market Supervisory Agency (Bapepam) for further investigation.

JSX director for listing and supervision Harry Wiguna confirmed that JSX had reported the case to Bapepam.

"There were some inconsistencies in the statements made by Lippo e-Net from those printed in a distributed press release and those made during a public expose," Harry said.

However, he said he did not know whether the inconsistencies from the insurance company could be categorized as releasing misleading information to the public.

"This is a task for Bapepam, which has the authority to judge," he added.

But according to the source, one of the main inconsistent statements made by Lippo e-Net was the company's Rp 1 trillion investment plan in the Internet business.

"JSX has studied all the statements in the distributed press releases, and compared them with those the company made during their public expose," the source added.

As reported in early January, Lippo e-Net announced it would soon allocate the above amount of fresh funds for the company's Internet business.

It then changed its name to PT Asuransi Lippo e-Net -- with Lippo e-Net as the company brand name -- from PT Asuransi Lippo Life.

Dandossi Matram from Bakrie Securities said 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," he said.

Meanwhile, Bapepam chairman Herwidayatmo also confirmed over the weekend that he also received a report from JSX on Lippo e- Net.

"Yes, I received the report on Friday afternoon from JSX and I have passed it on to Freddy Saragih (the agency's head of the Company Financial Assessment Bureau)," he said.

"Bapepam will take action if there has been a breach of law in the case," he said, adding that Bapepam would uphold the principle of fair information disclosure to the public.

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.

The law threatens violators with a maximum of 10 years imprisonment and a maximum Rp 15 billion fine.

Lippo e-Net president commissioner Billy Sindoro has denied that the company violated any laws.

"The Internet business is of the company's interest and we will invest in that to increase the value of stock held by investors," he told a news conference recently.

He stressed that Lippo e-Net had about Rp 2 trillion in assets that can be gradually used for Internet investment.

The Rp 2 trillion assets include Rp 170 billion in cash, Rp 1.2 trillion in marketable securities and the remaining in equity participation in nonlisted affiliates.

Lippo e-Net, listed on the JSX, currently manages less than 1 percent of the insurance premium funds placed by clients in the company as it has transferred more than 99 percent of the funds to its affiliate, PT AIG Lippo, which is 30 percent owned by Lippo e-Net. (udi)