Indonesia issues record fines to companies over stock market violations

JAKARTA: Indonesia's financial regulator has handed over sanction letters to parties found to have violated trading rules involving three listed companies, with fines totalling 2.1 trillion rupiah (US$116.67 million), it said late on Wednesday.

The fines, linked to trading in PT Dian Swastatika Sentosa Tbk, PT Barito Renewables Energy Tbk and PT Petrindo Jaya Kreasi Tbk, were the largest ever imposed by the regulator, known by its Indonesian abbreviation OJK, its chair, Friderica Widyasari Dewi, told reporters.

The OJK identified the sanctioned parties only by their initials.

The penalties were part of capital market reforms announced by the OJK last week, after MSCI warned it could downgrade Indonesian equities from "emerging" to "standalone" market status because not enough was being done to combat coordinated trading practices in the stock market.

The OJK said it imposed a 1.5 trillion rupiah (US$83.33 million) fine on a company identified as SMT for manipulating Dian Swastatika's shares, causing a sharp jump in the price.

Dian Swastatika is part of the Indonesian conglomerate Sinar Mas Group and operates in the mining and energy sectors.

A company identified as AH Ltd was fined 500 billion rupiah for obscuring information during the initial public offering of geothermal company Barito Renewables, while TC Pte Ltd was fined 100 billion rupiah for a similar offence related to the IPO of energy and mineral firm Petrindo, the OJK said.

Parties affiliated with the controlling shareholders of Barito Renewables and Petrindo were found to have concealed their affiliations and received a large portion of shares ahead of their respective IPOs, limiting the number of shares available on the market, the regulator said.

Barito Renewables and Petrindo are both controlled by Indonesian tycoon Prajogo Pangestu.

Those fined, Sinar Mas Group and Pangestu could not immediately be reached for comment.

The regulator announced the fines on Friday but did not provide details.

Dian Swastatika, Barito Renewables and Petrindo separately said in stock exchange filings on Monday that they respected the OJK's law enforcement measures and would comply with the rules.

The three companies were part of MSCI's indices but were removed earlier this year.

The OJK also said it had fined several securities companies over stock market violations and temporarily suspended underwriting permits for two individuals. It identified the sanctioned parties only by their initials.