Mandiri's glittering IPO campaign raises concern
Evi Mariani, The Jakarta Post, Jakarta
Bank Mandiri's IPO glittering campaign has raised the concern of a corporate governance watchdog, which says the public needs to be informed not only about the benefits of investing in the country's largest bank but also about the risks.
"An IPO campaign has to contain complete information about a company's prospectus, meaning it has to equally expose the benefits and the risks in the investment," Adi Rahman Adiwoso, chairman of the Indonesian Institute for Corporate Governance (IICG), said on Monday at a round-table discussion with several reporters.
"I see that Bank Mandiri's campaign puts more emphasis on the benefits," he said. "It is important to balance the information in order to prevent potential investors from having too-high expectations."
The bank plans to initially sell a 15 percent share in the bank to the public starting from July 2 to July 4.
To attract as many investors as possible, Bank Mandiri has been holding a massive campaign on its initial public offering (IPO) by placing large advertisements on and in every possible medium: television, radio, newspapers, magazines and outdoor ads. Among other enticements, it is offering luxury cars to five lucky investors.
Analysts said earlier that the bank's IPO plan had already had an impact on the stock market and had lifted the price of a number of banks' shares.
Adiwoso said that the IICG had called on the Capital Market Supervisory Agency (Bapepam) to implement a regulation on conducting IPO campaigns.
"In the United States, the Securities and Exchange Commission (SEC) implements a 'quiet period' when an IPO issuer is subject to a ban on promotional publicity," he said. "I think we should implement such a regulation."
A quiet period starts when an issuer holds a public offering and ends when the stocks are already listed. During the time, the issuer cannot reveal anything other than information in its prospectus, according to Adiwoso.
Separately, Bapepam chairman Herwidayatmo told The Jakarta Post that Bapepam had summoned last week the underwriters of Bank Mandiri's share offering, asking them to balance the campaign information between the benefits and the risks.