Indonesia market fines reached a record 2.1 trillion rupiah ($116.67 million) after the Financial Services Authority (OJK) penalised parties over trading violations involving three listed companies. The cases concern share manipulation and information concealed during initial public offerings.
Key Takeaways
- The OJK described the combined penalties as the largest it has ever imposed.
- A company identified as SMT received a 1.5 trillion rupiah fine for manipulating Dian Swastatika shares.
- The enforcement comes amid an MSCI warning about Indonesia’s emerging-market classification.
Table of Contents
- Indonesia market fines target manipulation and IPO disclosures
- Regulator expands on earlier announcement
- MSCI warning adds pressure for reform
Indonesia market fines target manipulation and IPO disclosures
The largest individual penalty went to SMT, which the OJK fined 1.5 trillion rupiah for manipulating shares in PT Dian Swastatika Sentosa Tbk. The regulator said the activity caused a sharp rise in the stock’s price. Dian Swastatika operates in mining and energy and belongs to the Sinar Mas conglomerate.
AH Ltd was fined 500 billion rupiah for concealing information during the IPO of geothermal energy producer PT Barito Renewables Energy Tbk. TC Pte Ltd received a 100 billion rupiah penalty for a similar violation involving the IPO of energy and minerals company PT Petrindo Jaya Kreasi Tbk.
According to the OJK, parties affiliated with the controlling shareholders of Barito Renewables and Petrindo concealed those relationships and secured substantial shareholdings ahead of the respective IPOs, limiting shares available in the market.
Regulator expands on earlier announcement
OJK Chair Friderica Widyasari Dewi described the sanctions as the regulator’s largest when speaking to reporters late on Wednesday. The fines had first been announced on Friday, with limited details.
In stock exchange filings on Monday, Dian Swastatika, Barito Renewables and Petrindo said they respected the enforcement measures and would comply with applicable regulations.
The OJK also penalised several securities companies and temporarily suspended underwriting permits for two individuals. It disclosed the sanctioned parties only by their initials.
MSCI warning adds pressure for reform
The action comes as Indonesia works to strengthen its capital market framework. MSCI has warned that Indonesian equities could move from emerging-market to standalone-market status over concerns about insufficient action against coordinated trading practices.
All three listed companies involved in the cases were previously included in MSCI indices but were removed earlier this year.
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