The Jiwasraya Case Handling Scandal, Lokataru: A Threat To The Indonesian Capital Market

JAKARTA - Aggressive law enforcement in the Jiwasraya default case has had an impact on the condition of the domestic capital market. The biggest impact of the Jiwasraya case was not on the decline in the value of the JCI, but on the shrinking number of transactions in the capital market, both by institutional investors and retail investors.

"Likewise, the frequency of daily transactions on the stock exchange has also slowed," said Executive Director of Lokataru Law and Human Rights Office, Haris Azhar in a report entitled, 'Law Enforcement Disrupts the Wheel of the Economy: The Jiwasraya Case and Its Impact on the Indonesian Capital Market', Wednesday 2 June 2021.

Through this Lokataru report, Haris continued, it was known that before being declared a default, Jiwasraya had sufficient reserves of funds. Precisely when it is declared to be in default, the reserve funds are frozen, cannot be used, and finally the Customer and third parties cannot access their rights.

Haris added that this report also revealed a number of irregularities that remained after the disclosure of the case.

"First, at the time of the announcement of default, Jiwasraya actually still had cash assets that were more than sufficient to pay the claims due. Second, the statement scroll was faster and preceded the completion of business schemes to protect the rights of third parties, customers, etc. Offers for settlement of the scheme new businesses appear later, that is without involving, the ways and interests, of the customers," he said.

Third, continued Haris, due to the statement of failure to pay, it created a chaotic market, especially Jiwasraya shareholders who started to withdraw their funds in droves. In addition, at the same time there are no new customers who want to buy Jiwasraya insurance products.

Fourth, failure to pay was made into a corruption case, which was then handled by the Attorney General's Office.

"The detention of a number of names has actually worsened the condition of the stock market, not only Jiwasraya, the enthusiasm of the capital market has decreased.

Furthermore, Lokataru assessed that the protracted settlement even though the company has sufficient cash to pay its obligations to policyholders has disrupted the trust that has been built for years.

After the case broke out, almost all existing policy holders were not willing to extend their insurance contracts. In fact, the policy holder for the current contract also ended the contract.

"Instead of seeking to return customers' money, the process of disclosure and law enforcement actually causes debt claims that continue to drag on, thus accelerating the collapse of Jiwasraya's credibility in the eyes of its customers, which then spread to the disruption of the performance of the Indonesian stock market," he said.

It is known that the AGO investigators assessed that Jiwasraya's failure to pay according to the audit of the Supreme Audit Agency, which amounted to Rp. 16.8 trillion, was a state loss. The loss came from the direct purchase of four shares, and the indirect purchase of shares through 21 Mutual Funds, 13 Investment Managers, which were claimed to be controlled by Heru Hidayat and Benny Tjokrosaputro.

The determination of the value of the loss is considered very problematic by Haris. Because the de facto shares are still owned by Jiwasraya but experienced a decline in share value (impairment). In addition, it is known that at the time of the purchase, the shares purchased by PT AJS were included in the LQ45 category which is technically liquid and has a small risk of impairment loss.

"The dynamic stock market makes the rise and fall of stock values unavoidable. Declaring impairment as a state loss and making it a criminal act besides being premature can also have a systemic impact and threaten the capital market, and then endanger the Indonesian economy, which is still struggling due to the pandemic. The government is hyping about trying to revive the economy, in fact the law enforcement process operating in the capital market indirectly endangers our economy," said Haris.

These two facts are the tip of the iceberg of other irregularities, such as Jiwasraya getting a loan from a number of state-owned banks, a syndicate of BUMN Karya, but the claim debt has not been paid.

"As a result of law enforcement, the value of claims debt continues to swell," he said again.

The Prosecutor's Office is also considered to fail to verify the assets confiscated or confiscated will have a systemic impact on capital market investors and consumers of the insurance business.

"On the other hand, the practice of confiscation and confiscation of assets in the Jiwasraya case which was met by lawsuits from third parties has also exposed the fact that there are legal loopholes related to the impact and consistency of decisions, as well as procedural law, all of which give way to the increasingly important settlement of the Bill on Asset Confiscation. " he said.

Haris also said that there were no Jiwasraya financial reports for 2018 published to the public. In the following year, oddly and interestingly, the asset value went to zero.

"We consider that these irregularities - and other irregularities which can be seen in our full report - must be explained in detail in public by those in authority. Otherwise, it is not impossible that the Jiwasraya case will become a template for scandal in the market arena. Indonesian capital in the future. The victims are again customers, and our stock exchange actors who at any time can be threatened by troubled law enforcement that is careless in investigating cases. Meanwhile, intellectual actors who are busy 'orchestrating' scandals are back on their way to the next arena, " said Harris.