NEWS

The case of PT Sekawan Intripratama Tbk (SIAP) 's share price manipulation was revealed as a test of the Financial Services Authority (OJK) credibility as a capital market umpire.

The case also became a stumbling block to efforts by self-regulatory organizations, namely the Indonesian Stock Exchange (IDX), the Indonesian Central Securities Depository (KSEI), the Indonesian Clearing and Guarantee Corporation (KPEI) to promote the capital market as a profitable investment vehicle.

Such cases will affect potential investors, especially young people and beginners who are currently the target market to boost the investor base. They will become easy targets of this stock price manipulation practice. Of course, transactions like this are not fair.

Actually, indications of SIAP shares being used as a means of manipulation (fried) were predictable long ago. This can be seen from the following. First, in the past year, the IDX has repeatedly suspended (SIAP) stock transactions, because the price moves abnormally. This unusual price movement is not supported by corporate action and solid financial fundamentals. At present, SIAP is still losing money.

The two backdoor listing actions that changed SIAP's business line from the plastic and packaging sectors to mining which led to a right issue action valued at Rp 4.68 trillion in 2014 was also allegedly full of 'games'. In essence, the governance of SIAP is very doubtful.

Provisions of Law

Unfortunately, the authority is unable to sniff out this matter. Until finally there was a failure to pay around Rp 100 billion from one of the securities companies (brokers) that facilitated the SIAP stock transaction. There are eight securities companies involved in this SIAP stock transaction. This default case reveals the suspicions that have occurred so far.

The number of securities companies involved was deliberately designed so that transactions became complicated and not suspected. In fact, the person behind all these transactions is the same person. Of course, the trigger that made all this unfold was the force sell carried out by the holders of the Repo or Repurchase Agreement understand SIAP.

The Repo holder smells that those who repo the SIAP shares cannot carry out their obligations in accordance with the agreed agreement. As a result of this selling pressure, the price of SIAP shares continues to be depressed. This massive selling pressure makes no SIAP shares 'accommodating', until it leads to default.

In his paper entitled "Stock Market Manipulation: Theory and Evidence (2003)", Aggrawal & Wu said, illiquid stocks will often be a means used to manipulate prices. Not only that, prices and liquidity will also increase quite quickly, when there is selling pressure. The results of this study can certainly illustrate the conditions that occur in SIAP shares.

The case of stock price manipulation is not the first time this has happened. In 2002, a transaction like this had happened to the shares of PT Dharma Samudera Fishing Industries (DSFI) and Primarindo Asia Infrastructure (BIMA). A number of regulations have been implemented to make this happen, such as the application of sub-accounts and the obligation to carry out know your customer (KYC).

However, these regulations have not been able to eliminate the mode of price manipulation. This is because there are still gray areas that are used by stakeholders to make profits. Let alone in the Indonesian capital market whose market structure is not yet efficient. The United States capital market, which has a relatively efficient and mature market structure, can manipulate stock prices like this.

We can see how the stock price manipulation can be seen in Hollywood films, such as Wall Street (1987), Other's People Money (1991), Boiler Room (2000), Enron: The Smartest Guys in the Room (2005), Wall Street Money Never Sleeps (2010), and The Wolf of Wall Street (2013).

So, whatever the motive, stock price manipulation is one of the capital market crimes and this is contrary to Law No. 8 of 1995 concerning the Capital Market, specifically articles 91 and 92. Article 91 states that every party is prohibited from taking action, both directly and indirectly, with the aim of creating a false or misleading picture of trading activities, market conditions, or the price of securities on a stock exchange.

Article 92 also added that each party, individually or jointly with other parties, is prohibited from conducting two or more securities transactions, either directly or indirectly, causing the price of securities on the stock exchange to remain, up or down, with the aim influence others to buy, sell or hold securities.

Do not be easily tempted

In order to minimize the frequency of stock price manipulation and capital market fraud, OJK and SRO must be able to anticipate and fix gray areas of regulation that still have the potential to be used by irresponsible individuals.

In addition, Law No. 8 of 1995 concerning the Capital Market has indeed been urged to be revised, particularly in relation to penalties for violations of the capital market law which is currently still fairly mild. Compare capital markets in countries

going forward who gives damning penalties and fines. Even the perpetrators can be blacklisted from capital market activities for life if proven to have committed capital market crimes.

This is expected to cause a deterrent effect. However, above all, investors are also required to be smart in investing. Investing in the capital market should not be confused with playing gambling in a casino in the hope of earning huge profits in a short time. All need process, effort, discipline, and time in order to enjoy good investment returns.

Of course, it's fine, if investors invest short-term (trading) and choose stocks that are not liquid. However, the results are usually not optimal. This is shown in many study results, as did Barber & Odean (2000), who stated that short-term transactions are not good in producing optimal investment returns.

Therefore, investors should not be easily tempted by impressive share price increases in the short term (daily), without the support of clear corporate action and solid fundamentals. Stocks like this are suspect. Instead, focus on diversifying investment portfolios on stocks that are fundamentally good, have a solid business line, are well-known products, and have proven good corporate governance (GCG).

Not a few Indonesian capital markets have stock reserves with good criteria and have proven GCG. Happy investing and hopefully not easily trapped.

Written by: Desmon Silitonga-Analyst PT. Capital Asset Management

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http://en.beritasatu.com/home/man manip-harga-saham-dan-revisi-uu- pasar-modal/133917