The sky came crashing down for Budi last week as he left the three-story office building of PT Antaboga Delta Sekuritas Indonesia in South Jakarta. He had yet again failed to find a way to withdraw his investment of Rp 5 billion (US$415,000) from the ailing firm.
"This is my sixth visit in the space of a week and nobody can give me an answer as to how I can get my money back," he said, adding that he had put almost all of his savings in a form of reksadana (mutual funds) issued by Antaboga, a securities company affiliated with recently bailed out Bank Century.
Budi was among hundreds of Century customers who had been tricked by Antaboga into believing they would get a high return if they invested in their product.
The Antaboga case began as hundreds of worried investors were unable to redeem their investments from Antaboga after its selling agent Century was recently taken over by the government amid severe financial distress.
Earlier this month, three investors -- now it has increased to 65 -- had reported the company's payment default to the Indonesian Capital Market and Financial Institution Supervisory Agency (Bapepam).
Bapepam and the National Police had brought Antaboga president director Hendro Wiryanto in for questioning Thursday for 11 hours and later announced that Hendro and two other Antaboga executives, director Anton Tantular and Commissioner Hartawan Aluwi, were suspects in the case.
The police however, have failed to arrest them all as two of them escaped. The two have since been put under a travel ban.
"They promised a number of Century's costumers that they would invest their money in the form of reksadana for high returns," said National Police spokesman Insp. Gen. Abubakar Nataprawira on Friday.
Antaboga has allegedly embezzled a total of Rp 233 billion, according to reports from costumers in three Century branches in Kelapa Gading, North Jakarta; Medan, North Sumatra; and Bali, the police said.
The amount, however, may still increase as a Bapepam investigator said earlier that Antaboga had collected more than Rp 1 trillion from its sales at Century branches all over Indonesia.
Founded in 1989, Antaboga, which was named after the Snake God in Balinese Hindu mythology, provides financial services including equity broking, investment banking and asset management to retail, corporate and institutional costumers.
Antaboga is linked to Century as it has a 7.44 percent stake in the lender. Moreover, Anton Tantular is the brother of Robert Tantular, a key shareholder of Century, who has been detained by the National Police for allegedly abusing his power by breaching regulations that led to Century's financial mess.
Meanwhile, Robert and Hartawan at Antaboga are sons-in-law of Sukanta Tanudjaja, the former owner of the giant textile producer PT Great River International.
Budi and hundreds of others could be said to have been naive in believing Antaboga and Century so easily. But most of the responsibility should be directed to the regulators, notably the central bank that oversees the banking sector and its products and Bapepam that oversees nonbank financial institutions.
Observers say that even though Century was only a selling agent for the product, it should have thoroughly screened all the products it sold and notified costumers of any risks.
It is still fresh in many people's minds what happened to dozens of Indonesian Citigroup customers who -- due to the central bank's weak supervision -- lost all their money in products linked to Lehman Brothers after the U.S. financial giant collapsed a few months ago.
While the customers lost a sizable amount, Citigroup has not been punished for selling products without first properly explaining all the risks to their customers.
"There is no reason that BI and Bapepam knew nothing about this case," said economist Ichsanudin Noorsy to The Jakarta Post over the weekend.
The Antaboga case proves the lack of law enforcement in the Indonesian financial market, Ichsanudin said. "BI and Bapepam undoubtedly have contributed to this mess."
Legislator Dradjad Wibowo echoed the argument, saying the regulators of capital markets and banking have once again put their competence and integrity into question over the Antaboga case.
"They should have strong market knowledge in the fields they regulate," said the member of House's Commission XI overseeing the banking sector and state finance.
"It is important for people to thoroughly research any financial product before investing their money in it, especially products which offer a particularly high gain," Dradjad added.
Last week Bapepam was in an ambiguous position by declaring that Antaboga's product was not a banking product or a capital market product. "Antaboga has no permission to issue mutual funds," Bapepam chief Fuad Rahmani said Friday.
For Budi, who has fallen victim in part to the weak regulatory supervision in the financial sector, all his dreams are fading away.
"They promised a 13 percent annual yield with a three-month term," Budi said, lamenting his decision to invest his money in the product in the first place.
"I do not know now where to turn." (hwa)
"This is my sixth visit in the space of a week and nobody can give me an answer as to how I can get my money back," he said, adding that he had put almost all of his savings in a form of reksadana (mutual funds) issued by Antaboga, a securities company affiliated with recently bailed out Bank Century.
Budi was among hundreds of Century customers who had been tricked by Antaboga into believing they would get a high return if they invested in their product.
The Antaboga case began as hundreds of worried investors were unable to redeem their investments from Antaboga after its selling agent Century was recently taken over by the government amid severe financial distress.
Earlier this month, three investors -- now it has increased to 65 -- had reported the company's payment default to the Indonesian Capital Market and Financial Institution Supervisory Agency (Bapepam).
Bapepam and the National Police had brought Antaboga president director Hendro Wiryanto in for questioning Thursday for 11 hours and later announced that Hendro and two other Antaboga executives, director Anton Tantular and Commissioner Hartawan Aluwi, were suspects in the case.
The police however, have failed to arrest them all as two of them escaped. The two have since been put under a travel ban.
"They promised a number of Century's costumers that they would invest their money in the form of reksadana for high returns," said National Police spokesman Insp. Gen. Abubakar Nataprawira on Friday.
Antaboga has allegedly embezzled a total of Rp 233 billion, according to reports from costumers in three Century branches in Kelapa Gading, North Jakarta; Medan, North Sumatra; and Bali, the police said.
The amount, however, may still increase as a Bapepam investigator said earlier that Antaboga had collected more than Rp 1 trillion from its sales at Century branches all over Indonesia.
Founded in 1989, Antaboga, which was named after the Snake God in Balinese Hindu mythology, provides financial services including equity broking, investment banking and asset management to retail, corporate and institutional costumers.
Antaboga is linked to Century as it has a 7.44 percent stake in the lender. Moreover, Anton Tantular is the brother of Robert Tantular, a key shareholder of Century, who has been detained by the National Police for allegedly abusing his power by breaching regulations that led to Century's financial mess.
Meanwhile, Robert and Hartawan at Antaboga are sons-in-law of Sukanta Tanudjaja, the former owner of the giant textile producer PT Great River International.
Budi and hundreds of others could be said to have been naive in believing Antaboga and Century so easily. But most of the responsibility should be directed to the regulators, notably the central bank that oversees the banking sector and its products and Bapepam that oversees nonbank financial institutions.
Observers say that even though Century was only a selling agent for the product, it should have thoroughly screened all the products it sold and notified costumers of any risks.
It is still fresh in many people's minds what happened to dozens of Indonesian Citigroup customers who -- due to the central bank's weak supervision -- lost all their money in products linked to Lehman Brothers after the U.S. financial giant collapsed a few months ago.
While the customers lost a sizable amount, Citigroup has not been punished for selling products without first properly explaining all the risks to their customers.
"There is no reason that BI and Bapepam knew nothing about this case," said economist Ichsanudin Noorsy to The Jakarta Post over the weekend.
The Antaboga case proves the lack of law enforcement in the Indonesian financial market, Ichsanudin said. "BI and Bapepam undoubtedly have contributed to this mess."
Legislator Dradjad Wibowo echoed the argument, saying the regulators of capital markets and banking have once again put their competence and integrity into question over the Antaboga case.
"They should have strong market knowledge in the fields they regulate," said the member of House's Commission XI overseeing the banking sector and state finance.
"It is important for people to thoroughly research any financial product before investing their money in it, especially products which offer a particularly high gain," Dradjad added.
Last week Bapepam was in an ambiguous position by declaring that Antaboga's product was not a banking product or a capital market product. "Antaboga has no permission to issue mutual funds," Bapepam chief Fuad Rahmani said Friday.
For Budi, who has fallen victim in part to the weak regulatory supervision in the financial sector, all his dreams are fading away.
"They promised a 13 percent annual yield with a three-month term," Budi said, lamenting his decision to invest his money in the product in the first place.
"I do not know now where to turn." (hwa)
Souerce: The Jakarta Post , Jakarta | Tue, 12/09/2008 11:43 AM | Business
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