(Bloomberg) -- Indonesia’s market regulator suspended five stocks from trading, stepping up a crackdown against volatile shares linked to a liquidity crisis at the nation’s oldest insurer.
The Indonesia Stock Exchange halted trading in shares of fish breeder PT Inti Agri Resources, miner PT SMR Utama and maritime services company PT Trada Alam Minera from Thursday on orders of the Financial Services Authority, known as OJK. The suspension of real estate developer PT Eureka Prima Jakarta in April and holding company PT Hanson International earlier this week will continue until further orders, the bourse said in a statement.
The suspension was ordered “for the purpose of investigation into Jiwasraya,” Sekar Putih Djarot, a spokeswoman for the authority, said in a text message, referring to an ongoing probe into mounting losses at PT Asuransi Jiwasraya.
Indonesian prosecutors have arrested five people, including a former president director and chief financial officer of the state insurer after an audit last year showed the company had negative equity of 27.2 trillion rupiah ($2 billion). The probe also uncovered alleged irregularities and fraud in the management of its savings and investment plans. The inability of Jiwasraya to pay some of its 7 million-plus clients have spurred calls for a government bailout.
Insurer Facing $2 Billion Financial Hole Sparks Call for Rescue
The losses at Jiwasraya stemmed from mispricing, reckless investment activities, aggressive window dressing and liquidity pressure, according to the insurer’s new President Director Hexana Tri Sasongko. Inti Agri, SMR Utama, Trada Alam, Hanson International and Eureka Prima are some shares in which Jiwasraya invested, Bisnis Indonesia newspaper reported, citing Sasongko.
Those arrested by the prosecutors also include Benny Tjokrosaputro, president director of Hanson International, and Heru Hidayat, president commissioner of Trada Alam. Hidayat is also commissioner and shareholder of Inti Agri. Both Tjokrosaputro and Hidayat have denied any wrongdoing.
To contact the reporter on this story: Tassia Sipahutar in Jakarta at ssipahutar@bloomberg.net
To contact the editors responsible for this story: Thomas Kutty Abraham at tabraham4@bloomberg.net, Margo Towie
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