[Kabar-indonesia] AFR: Australia, Indonesia Team Up to Fight Fraud

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Australian Financial Review
Wednesday, August 2, 2006

ASIC helps Indonesia to tackle fraud

Morgan Mellish Jakarta

Indonesia's corporate regulator is undergoing a major restructuring
with the help of its Australian counterpart in a bid to reduce fraud
and boost investor confidence in the country's sharemarket.

The chairman of Indonesia's Capital Market Supervisory Agency, Fuad
Rahmany, said the organisation, known as Bapepam, was shifting from
the Department of Finance to become an independent agency to better
cope with growth in Indonesia's capital markets.

Dr Rahmany said shonky business practices were rife in Indonesia's
financial markets, but he was confident that assistance from
Australia's regulators would help stamp out the problem.

In recent months, Bapepam has sent eight bureaucrats on secondment 
to the Australian Securities and Investments Commission, while four 
ASIC staff are advising it in Jakarta.

"We are now in a period of launching comprehensive reform," 
Dr Rahmany said.

"Our problem right now is it is easy to design a policy, but it's
difficult to build the capacity to implement the policy. We still 
lack the human resources and skill."

ASIC chairman Jeffrey Lucy, who was in Jakarta this week, said 
his staff were running programs at Bapepam covering prospectus 
evaluation and monitoring, policy work and enforcement.

"We've had a very close relationship with our colleagues at Bapepam
over many years," Mr Lucy said. "Historically, we've looked at these
relationships as a one-off, but there really is a much greater
willingness now to look at opportunities where we can share
information."

The staff-swapping program is part of a five-year, $50 million
Australian initiative to help Indonesia improve governance skills.

Poor corporate governance was one of the main reasons for Indonesia's
financial crisis of the late 1990s, from which the country is still
emerging. Since 2001, the Jakarta Stock Exchange's benchmark index 
has surged about 235 per cent.

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Joyo Indonesia News Service
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