Global Market: Indonesia imposes record $117 million in fines for stock market violations

The OJK said it fined a company identified by the initials SMT 1.5 trillion rupiah for manipulating Dian Swastatika shares.

The penalties relate to trading in PT Dian Swastatika Sentosa Tbk, PT Barito Renewables Energy Tbk and PT Petrindo Jaya Kreasi Tbk, and represent the largest sanctions ever imposed by the regulator, OJK Chair Friderica Widyasari Dewi told reporters late on Wednesday, the report stated.

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The enforcement action comes as Indonesia seeks to strengthen its capital market framework after index provider MSCI warned that Indonesian equities could be downgraded from emerging-market to standalone-market status over concerns about insufficient action against coordinated trading practices.

The OJK said it fined a company identified by the initials SMT 1.5 trillion rupiah for manipulating Dian Swastatika shares, resulting in a sharp increase in the stock’s price. Dian Swastatika, part of the Sinar Mas conglomerate, operates in the mining and energy sectors.

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A company identified as AH Ltd was fined 500 billion rupiah for concealing information during the initial public offering of geothermal energy producer Barito Renewables Energy. Meanwhile, TC Pte Ltd was fined 100 billion rupiah for a similar violation involving the IPO of energy and minerals company Petrindo Jaya Kreasi, the regulator said, the report stated.

The OJK found that parties affiliated with the controlling shareholders of Barito Renewables and Petrindo had concealed their affiliations and obtained a substantial portion of shares ahead of the companies’ respective IPOs. This restricted the number of shares available in the market, according to the regulator.

The regulator announced the fines on Friday but initially provided limited details. Dian Swastatika, Barito Renewables and Petrindo subsequently said in stock exchange filings on Monday that they respected the OJK’s enforcement measures and would comply with applicable regulations, Reuters reported.

All three companies had previously been included in MSCI indices but were removed earlier this year.

The OJK also imposed penalties on several securities companies for stock market violations and temporarily suspended underwriting permits for two individuals. The regulator identified the sanctioned parties only by their initials.

The action forms part of Indonesia’s broader efforts to improve market transparency and address concerns over trading practices as it seeks to maintain investor confidence and its standing among emerging equity markets.