IDX Chief Responds to Questions Regarding Haji Isam’s Company Shares Being Used as Loan Collateral

The Indonesia Stock Exchange (IDX) has responded to the issue regarding the shares of companies owned by businessman Andi Syamsudin Arsyad, also known as Haji Isam, namely PT Jhonlin Agro Raya Tbk (JARR) and PT Pradiksi Gunatama Tbk (PGUN), being used as collateral for a loan taken out by PT Jhonlin Baratama from Bank Mandiri (BMRI).

IDX Chief Executive Jeffrey Hendrik emphasised that the authority had requested disclosure of information from the relevant companies.

However, he stated that whether or not such a loan transaction is permissible falls within the remit of banking regulations, not the capital market.

“As regards disclosure of information, we have already requested that information be disclosed. Beyond that, it is, of course, a matter for banking regulations as to whether such transactions are permitted or not, as this is not a capital market transaction,” said Jeffrey when met at the IDX building in South Jakarta on Monday (19 October).

Jeffrey explained that the exchange also has no authority to cancel transactions that have already been agreed upon by investors, borrowers and lenders.

“Oh no, transactions that have already been carried out by investors, which are agreements between the investors themselves, cannot be cancelled by the exchange,” he said.

Regarding the limited responses from the issuer’s management concerning the details of transactions at the level of controlling shareholders, Jeffrey revealed that the exchange interacts with corporate entities, not individuals.

“It is true that some transactions are carried out by individuals rather than by the corporation. However, the exchange naturally seeks clarification from the corporation, not from individuals,” explained Jeffrey.

Nevertheless, Jeffrey assured that the exchange continues to follow standard operating procedures (SOPs) to issue clarification requests where necessary.

The IDX will scrutinise the materiality thresholds for transactions in accordance with applicable capital market regulations regarding potential further disclosure requirements from the lending bank.

“There is a materiality threshold. Is the value material for that bank? If it meets that criterion, then disclosure is required. We will assess this in accordance with capital market regulations,” he concluded.

Previously, two companies owned by Haji Isam pledged shares to PT Bank Mandiri (Persero) Tbk on 30 September, amidst plans to acquire shares in PT Bayan Resources Tbk (BYAN) through PT Jhonlin Baratama.

This action was disclosed via a disclosure statement on the Indonesia Stock Exchange (IDX) on Wednesday (7 October).

Firstly, Indra Irawan, Chief Executive of PT Jhonlin Agro Raya Tbk (JARR), explained that a share pledge transaction had been carried out by its controlling shareholder, PT Eshan Agro Sentosa, involving 7,997,556,204 shares.

Secondly, Tamlikho, Director of PT Pradiksi Gunatama Tbk (PGUN), explained that share pledge transactions had been carried out by its controlling shareholders, namely PT Araya Agro Lestari, PT Citra Agro Raya and PT Baramega Citra Mulia Persada.

Specifically, under the agreement, PT Araya Agro Lestari pledged 2,205,667,896 shares, PT Citra Agro Raya pledged 2,194,778,786 shares, whilst PT Baramega Citra Mulia Persada pledged 900,000,250 shares.

Thus, the total number of PGUN shares pledged by these three entities affiliated with Haji Isam amounts to 5.29 billion shares.

“Purpose of the Transaction: As collateral for credit facilities obtained by the Company’s affiliates,” wrote the management of both companies in a disclosure to the Indonesia Stock Exchange (BEI) on Wednesday (7 October).

Each management team also emphasised that the share pledge did not result in a change of control over the company. The four companies remain the controlling parties, constituting the Company’s Organised Group.

Furthermore, the share pledge transaction does not result in any dilution of share ownership and does not alter the Company’s issued or paid-up capital.

“The Company’s Board of Directors confirms that the transaction was conducted in accordance with due process and applicable laws and regulations,” explained the management.