ASIA.NIKKEI.COM | 16 November 2016
NEW YORK/JAKARTA — Indonesia’s richest family has transferred some 177 trillion rupiah ($13.28 billion) worth of shares in Bank Central Asia, the country’s largest private lender, from an entity in Mauritius to a domestic one. Market watchers reckon the move was prompted by the Joko Widodo government’s tax amnesty program.
In a stock exchange filing on Tuesday, BCA said the owner of 11.626 billion shares, or 47.15% of the bank’s issued shares, changed from Farindo Investment (Mauritius) to a local entity called Dwimuria Investama Andalan last Friday. Farindo Investment was ultimately owned by members of the Chinese-Indonesian Hartono family, who ranked sixth on Forbes magazine’s 2016 list of wealthy families in Asia with a net worth of $18.6 billion.
Observers said similar transactions will follow and help dismantle opaque ownership structures in Indonesia’s fragmented stock market. “Sixty-five percent of our trades are domestic and 35% are foreign, but the foreign ownership is higher,” noted IDX chief executive Tito Sulistio. “Why? Because many Indonesians own the shares through foreign entities.”
Sulistio continued: “In the future, it will be clear who owns shares in what during stock market transactions, there will be transparency in the stock market. And this has started with BCA.”
Yustinus Prastowo, executive director of the Center for Indonesia Taxation Analysis, a think tank, called the move “a consequence of the tax amnesty” and noted that tax amnesty participants “will have to disclose the ownership they have [in publicly listed companies] through special purpose vehicles.”
A BCA spokesperson did not immediately respond to a request for comment. Members of the Hartono family could not be reached for comment.
Under the amnesty program, individuals who come clean about undeclared assets and pay a small percentage of the value are exempted from criminal charges. Launched in July, the initiative has already stirred up some 3.9 quadrillion rupiah in declared assets.
The Hartono family, also known for its ownership of major cigarette maker Djarum Group, was part of a consortium that bought a majority stake in BCA in the early 2000s. The purchase was made in an auction held by a government agency tasked with selling assets nationalized during the 1997-1998 Asian financial crisis.
BCA is currently the country’s third-largest bank by assets and has a network of around 1,200 branches across the archipelago.
