The Financial Services Authority revoked brokerage firm PT Recapital Sekuritas Indonesia’s license - Photo: Special

JAKARTA (TheInsiderStories) – The Financial Services Authority (FSA) on Monday (02/03) revoked brokerage firm PT Recapital Sekuritas Indonesia’s license to operate as it was found to have submitted a misleading net adjusted working capital report. The regulator also imposes Rp700 million (US$50,000) for the violations.

Based on announcement in its official website, the authority also imposed an Rp600 million fine on Recapital Sekuritas president director Abi Hurairah Mochdie for being responsible for the submission of a misleading report. The regulator barred Mochdie from holding a position as a manager, shareholder, and a key person, or in charge of companies engaged in the capital market for three years.

FSA’ deputy commissioner for capital market supervision, Djustini Septiana, explained in a letter issued by the authority on Jan. 30, the firm was found to have concealed an exchange bond issuance agreement between the firm and PT Nexis Inti Persada in 2016.

“The company also failed to record the receipt of funds from the issuance as a liability in the report. As a result, Recapital Sekuritas’ net adjusted working capital value inflated over discrepancies in the report,” Septiani said.

The regulator also found that the bond issuance resulted in the firm’s net adjusted working capital value to be reduced to below the minimum requirement of Rp25 billion, thus meeting the requirement to have its brokerage license revoked.

“Following the revocation, Recapital Sekuritas is prohibited from conducting business as a brokerage dealer and underwriter,” the letter reads, also revokes Mochdie’ securities company representative license due to the violations.

Recapital Sekuritas, part of private equity firm PT Recapital Advisors, was founded by the Indonesian Chamber of Commerce and Industry chairman Rosan Roeslani and former vice-presidential candidate Sandiaga Salahuddin Uno in 1997. The initial name was PT Republik Indonesia Funding or Finance Indonesia. The name was later changed to Recapital until it had employed 24,000 employees.

Its customers who still have shares or bonds in the firm could claim their securities with the Indonesian Central Securities Depository. They could also claim their funds with PT Bank Mandiri Tbk (IDX: BMRI), PT Bank Central Asia Tbk (IDX: BBCA) and PT Bank CIMB Niaga Tbk (IDX: BNGA). Previously, the Indonesia Stock Exchange (IDX) revoked Recapital Sekuritas’ brokerage firm membership on the bourse on Jan. 29, 2018.

Besides Recapital Sekuritas, Recapital Advisors also has PT Recapital Asset Management, PT Global Sarana Lintas Artha, PT Recapital Life Insurance (Relife), PT Recapital General Insurance (Reguard), and has bought PT Bank Pundi Tbk (IDX: BEKS).

US$1=Rp14,000

Written by Lexy Nantu, Email: lexy@theinsiderstories.com