Wirawan, a lawyer from Sholeh, Adnan & Associates, said Harun had failed to make a debt payment worth US$2.07 million, which had forced the company to sell to his collateral.

According to Wirawan, Harun opened a margin account on March 16, 2012, and then applied for loans and transferred Cakra Mineral stocks as collateral.

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"Harun made several loans from March 2013 to January 2014 and then refinanced the unpaid loans by extending the tenor. As of March 30, 2015, the loans totaled $2.07 million and in default status," he told thejakartapost.com in Jakarta on Thursday.

Amid the default status, the value of the Cakra shares in the market decreased to such an extent that Cedrus made a margin call, obliging Harun to add $300,000 to the collateral. Harun agreed to pay it with Cakra shares and transferred 27 million shares worth $300,000 at the market price of Rp 124 per unit.

"Cedrus had to sell the stocks to cover the losses due to the loan default. And, according to the margin account agreement, Cedrus has the right to sell the collateral to cover the losses without the investor’s consent," Wirawan said. (ags)

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