Mulyani’s bosses annul Bakrie suspension lift

Aditya Suharmoko and Rendi A. Witular ,  The Jakarta Post ,  Jakarta   |  Thu, 11/06/2008 7:53 AM  |  Headlines

The government annulled a decision Wednesday by the Indonesia Stock Exchange (IDX) to lift a trading suspension on PT Bumi Resources, in a move experts say is aimed at keeping the interests of the influential Bakrie family intact.

Before morning trading, the IDX said in a statement it would lift the Bumi suspension after hearing PT Bakrie & Brothers’ explanation about a deal to sell its 35 percent stake in Bumi to Northstar Pacific.

The decision was believed to be supported by Finance Minister Sri Mulyani Indrawati, whose ministry oversees the Capital Market Supervisory and Financial Institutions Agency (Bapepam-LK).

However, the IDX scrapped its decision an hour later after a request from the government.
“After considering a request from the government, the exchange decided to delay lifting the suspension until further notice,” the IDX said in a statement.

IDX president director Erry Firmansyah refused to explain the reason behind the request.
“It’s the government who wanted it, the government of the Republic of Indonesia,” he said, refusing to identify which institution had demanded the suspension.

A source at the Finance Ministry said the request was not from the ministry, and Mulyani did not comment on the issue.

“It was a request from an office higher than that run by Mulyani,” the source said.

Presidential spokesman Andi Mallarangeng dismissed speculation President Susilo Bambang Yudhoyono was behind the intervention, saying the Bakrie mess was not the President’s concern.

Capital market analyst Yanuar Rizky said the government’s shocking intercession had diluted its own credibility as the referee of the capital market.

“This move proves there are conflicts of interest among factions within the government to protect certain ruling elites,” he said.

Trading in shares of Bakrie & Brothers, Bumi and PT Energi Mega Persada — all part of the Bakrie Group of companies — have been suspended by the IDX since Oct. 7, following sharp falls in share prices due to reports Bakrie was having trouble with debt repayments.

Bakrie & Brothers, the nation’s largest publicly listed investment firm, announced on Nov. 1 that Northstar, a local unit of U.S. buyout giant Texas Pacific Group, had agreed to pay US$1.3 billion for its 35 percent stake in Bumi.

Northstar, believed to be teaming up with state mining firms, must wrap up the deal within 28 days.

Analysts say a lifting of the suspension would have harmed the deal, with the Bumi stake expected to be heavily devaluated as investors promptly sell them over worries the stake could drop further due to uncertainties over Bakrie’s debt arrangements.

Help from the government will mean a lot for the Bakrie family, headed by Coordinating Minister for the People’s Welfare Aburizal Bakrie, following its role as a key financier of Yudhoyono’s 2004 presidential campaign. (hwa)

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FEUIer (not verified) — Mon, 11/10/2008 - 11:35am

Being an agent of change is never easy. The difference is Mbak Ani has steadily marched forward despite the obstacles, whereas SBY, who actually had been gradually earning many's respect, seems very wobbly lately. Too bad.

Indonesia may not get yet another umpteenth chance to get rid of corruption, cronyism and nepotism, doesn't anyone in Gov't realizing this? Why cornering and hackling the only voice of reason at our probably last chance in the world's eyes? Mbak Ani may have a steely heart and gut a la Madeleine Albright, but this doesn't send an encouragement to other policymakers who are trying to do the right thing one clause at a time.

I'm just so mad and sad at the same time.

Joachim (not verified) — Sat, 11/08/2008 - 8:26am

“It was a request from an office higher than that run by Mulyani,”
what is higher than this?
you can figure it yourself

"Help from the government will mean a lot for the Bakrie family"
why did Bakrie get special treatment?
because...
"following its role as a key financier of Yudhoyono’s 2004 presidential campaign"

Iyen Liem (not verified) — Fri, 11/07/2008 - 11:23am

First of all, I would like to ask the foreign investors to not to intervene in our internal affairs of country businesses. The foreign funds are blessing and cursing. However, the funds indeed more cursing, The foreign investors always look for the cheap bargain in the Jakarta IHSG, speculating with the stocks,making the stocks unstable up 50%,then plunges 70% in a day. Suddenly, The rupiah and stock markets were unstable. As a country, we had better do away "Capitalism" and protect our economy. In my perspective, the government should own fully the essential companies that operating for the public interests. For instance, Telkom,pgas,water, fuel,etc never release these rights to foreign investors,thus we can control our own fate and price.
I support the decision of our Ministers' decision,not to lift the suspension, good works.

Peter Link (not verified) — Fri, 11/07/2008 - 9:32am

The transparency rules of stock market trading is to institute objective measures to provide transparency to investors and companies, facilitate uniform application of the rules.
This Bakrie's deal is doing the opposite.
More attention should be paid to what is happening and who is instigating it.

Sean Wayman (not verified) — Thu, 11/06/2008 - 7:25pm

Sri Mulyani has been fighting this. As the article clearly indicates, it was higher up than her. SBY's presidential campaign was funded by Bakrie. That SBY has kept Bakrie on as the Minister for People's Welfare after his company created a manmade disaster at Sidoarjo and then refused to compensate the people whose houses he destroyed is a disgrace.

Raj parkash (not verified) — Thu, 11/06/2008 - 11:57am

the credibility of indonesia as a nation rife with corruption again is put to question over the interference of the government in Bakrie affairs.

Does the president not understand that his weak government and he will never be taken seriously by western nations as long as corruption exists and seems to exist from the top!!!

the president needs to stop interfering and start making positive and correct decisions worthy of his office while not allowing anyone to interfere in the free market economy.

what is happening to Bakrie group is their own doing and he should not support them!!!!

John Thomas (not verified) — Thu, 11/06/2008 - 9:58am

Shame on the Government and Sri Mulyani,if indeed she was involved,in this very clear case of cronyism aimed at protecting old and "colorful" interests.Why not let the stock trader so that the price can fall so that it can be bought more cheaply by interested parties. That's the way a normal free market works?!At the same time she has washed her hands of Indover the BI subsidiary whose failure will come back to haunt her and the Government. Indonesia at its worst again,its reputation in pieces, and from people who do,or at least should, know better.

John Ralph (not verified) — Thu, 11/06/2008 - 9:47am

And Indonesians wonder why people all around the world look down at them when perhaps a certain Minister high than the Finance Minister interferes. This high person in the Golkar party is very disliked by Indonesians as a whole, one reason why he will never become a President. Thanks to God for that, otherwise Indonesia is finished. We all know that this is political as everyone is putting their hand out and asking what is in this for me. Cowboys at every turn.

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