Mandiri's glittering IPO campaign raises concern

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.