QSAR did not follow proper procedures: Bapepam
The Jakarta Post, Jakarta
The Capital Market Supervisory Agency (Bapepam) said that agribusiness company PT Qurnia Alam Raya (QSAR) had not followed proper procedures in raising funds from public investors.
But Bapepam Chairman Herwidayatmo said on Tuesday that the agency could not take any action against the management of the firm because the current capital market law did not provide the agency with clear-cut authority to deal with such a case.
"So, until the revised law (on capital market) is approved by the House of Representatives, we cannot do anything about this," he told reporters, referring to the law currently under deliberation in the House.
Unlike the current law, Herwidayatmo went on, the revised law clearly outlines the powers of the agency and where it would stand in handling such a case.
QSAR runs an agribusiness operation in West Java. The company managed to raise around Rp 500 billion (around US$55 million) from over 6,000 individual investors, promising them huge returns. But reports have said that the company is now bankrupt and the whereabouts of its president Ramli Araby is unknown, causing the public investors to suffer huge losses.
Concerning the QSAR scandal, he said that the company had violated existing regulations when it raised the money by announcing its offer in the newspapers.
"This kind of fund-raising procedure is not in line with the capital market law, which requires the company to provide a prospectus to investors explaining everything including business risks," he said.
According to the capital market law, a company raising funds from over 300 individual investors must first registered itself with Bapepam, a procedure QSAR ignored. The violation of this procedure is a serious crime.
But Bapepam seems to be evading responsibility in monitoring fund raising by companies like QSAR, as Herwidayatmo said that "there's nothing we can do (about the scandal)."
Such a statement has dealt a further blow to public investors.
What's more apparent however, is that the comments showed signs of the agency skipping responsibility despite the fact that the company raised funds from the public, which puts it under Bapepam's supervision.
The QSAR saga started several months ago when the company collapsed, leaving investors and their huge investment in limbo.
Investors -- comprising military officers, businesspeople, housewives, legislators and others -- fell for the company's lucrative offer and hoped to gain hefty profits in a short period of time.
The company itself is located in the West Java town of Sukabumi and claims to own some 1,680 hectares of land, which it used to cultivate agricultural products.
Starting in March, the company failed to fulfill its obligation as promised, sparking anger among investors, who are now threatening to confiscate the company's assets.
To make it worse, top officials of the company have disappeared.
Not only did it create jitters among the people, but it also drew calls for the authorities to tighter supervision to prevent similar cases of fraud from taking place.
Meanwhile, in a new development, West Java Police have imposed an overseas travel ban on company president Ramli Araby.
The province's chief of police Sudirman Ail said on Tuesday, as reported by Antara that the police would track down Ramli to hold him responsible.
The police headquarters spokesman Edward Aritonang also said that three bank accounts belonging to Ramli have been frozen. "The top officials of QSAR have committed criminal acts."