Agence France-Presse . Jakarta
Pressure grew on Indonesian market regulators Tuesday to launch an investigation into the initial public offering of Krakatau Steel, amid allegations of insider trading.
Shares in the country’s biggest steelmaker soared 49 per cent from their offer price of 850 rupiah (nine cents) when they hit the market on November 10, in a showcase listing for Southeast Asia’s biggest economy.
But the excitement has soured due to claims that the IPO, which was nine times oversubscribed, was priced artificially low to benefit a clutch of well-connected investors.
Lawmakers in the House of Representatives on Monday added their voices to calls for an investigation.
‘The parliament has agreed that Krakatau Steel and its underwriters should be investigated,’ said Achsanul Qosasi, a member of parliament from the Democrats party of president Susilo Bambang Yudhoyono.
‘There are many noises and rumours that the company and underwriters deliberately set a low offer price to serve the interests of certain groups.’
Lawmakers demanded the Supreme Audit Agency — which oversees government transactions — carry out an investigation ‘as soon as possible’, he added.
Coordinating minister for the economy Hatta Rajasa has reportedly backed calls for a probe, saying: ‘Everything that does not involve state secrets can be opened to the public.’
IndoPremiere Securities fund manager Suherman Santikno agreed that there should be a probe into the IPO of Krakatau Steel, as there were allegations that the share was set at an unfair price.
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