OJK Updates Regulation on Financial Transparency of Open Companies

JAKARTA - Indonesian Audit Watch (IAW) highlighted the annual report of PT Ciputra Development Tbk (CTRA) which was considered neat and administratively compliant, but left substantive transparency issues related to alleged legal cases that dragged its affiliated entities.

IAW Founding Secretary Iskandar Sitorus said that formally, CTRA had fulfilled all obligations as a public company, ranging from audited financial statements, disclosure of ownership structure, to sustainability reports.

"From an administrative point of view, the CTRA report looks perfect. All formal obligations are met. But administrative compliance must be balanced with substantial transparency," Iskandar said in his statement, Sunday, February 1.

According to him, based on the Capital Market Law and a number of Financial Services Authority (OJK) regulations as well as the Indonesia Stock Exchange (IDX), CTRA routinely submits financial statements, share ownership, and other material information. Therefore, from the perspective of domestic regulators, there is no formal violation.

However, IAW assessed that the gap arose because domestic standards had not strictly regulated the obligation to disclose the relationship between issuers and legal cases involving non-listed affiliated entities, as long as the parent company had not been designated as a suspect.

"Here is the problem. Our regulations do not require clear disclosure of affiliation that is dragged into legal cases, even though such information can greatly affect investor decisions," he said.

IAW revealed that since 2025, the North Sumatra High Prosecutor's Office has investigated alleged corruption in the transfer of rights to land with an area of 8,077 hectares owned by PT Perkebunan Nusantara (PTPN) to PT Ciputra Land through an operational cooperation scheme (KSO). In the process, investigators have seized documents, examined dozens of witnesses, and detained a number of officials from the National Land Agency (BPN) and the Director of PT Nusa Dua Propertindo (NDP).

However, IAW assessed that there was no open disclosure from CTRA as an issuer related to the affiliation of its affiliation with the case to the public investors.

"In fact, the POJK on the delivery of material information requires issuers to report any information that could affect the price of shares and investment decisions. The connection with the investigation of legal cases is clearly included in the sensitive category," said Iskandar.

IAW also referred to a number of Financial Audit Reports (LHP) of the Financial Audit Agency (BPK) which in recent years have found weaknesses in the governance of cooperation between SOEs and the private sector, especially in the management of land assets.

"One of the key findings is the weak documentation of agreements, the discrepancy with the work plan, and the lack of substantive document support for the calculation of state obligations," he said.

According to him, the BPK's findings do not directly accuse CTRA, but show the fragility of the supervision system which can open the door to the occurrence of problematic transactions.

"If supervision at the level of SOEs is weak, how can investors be sure that the information disclosed by private issuers is complete and honest," he said.

IAW assessed that although legally formally, CTRA has not violated domestic rules, from the perspective of global governance such as MSCI standards, not disclosing the legal risks of its main affiliates can be a negative signal for the quality of transparency of the Indonesian capital market.

Therefore, IAW encourages regulators to strengthen the rules of information disclosure.

"OJK must revise the material information rules, BEI needs to tighten monitoring of issuers with complex affiliate structures, and investors must be more critical, not just relying on formal reports," said Iskandar.

He emphasized that transparency is not merely fulfilling a list of administrative obligations, but rather a matter of honesty in opening up all relevant risks to the public.

"Transparency is not about a regulatory checklist, but about the courage to show investors the true condition," he said.