By Eko B. Supriyanto, Editor-in-Chief of Infobank Media Group
“The capital market is not merely a place to turn a profit or a matter of formal legalities and numbers. It is a moral institution. It embodies a mandate for transparency, the public’s right to share in ownership, and most importantly: a mechanism for social oversight of capitalism.” Such has been the prevailing dogma in the capital market for a long time.
Recently, the stock exchange floor has been abuzz with unsettling rumors: speculation regarding the potential delisting of Bank Danamon Indonesia. The root of the problem is a classic one—a technical issue allowed to drag on—namely the inability—or unwillingness?—to meet the minimum free float requirement of 15 percent. Danamon’s public shares are a mere fraction, squeezed under the wing of the Japanese financial giant, Mitsubishi UFJ Financial Group (MUFG), which controls over 92.47 percent, leaving only 7.53 percent in public hands.
In fact, Bank Danamon’s management has spoken out strongly to dispel these rumors. They have stated that they have no plans to go private and are currently approaching the Financial Services Authority (OJK) to find a solution to comply with the 15 percent rule. This is a fact we must respect. However, in economic-political analysis, official statements are often merely an emergency brake to stem market panic, while the dynamics beneath the surface continue to churn with speculation.
Let’s look at the essentials. Why should the public be concerned if a publicly listed company decides to delist and revert to a private company, especially when it is a bank whose assets are largely public funds? Imagine: Danamon, with total assets of Rp289.52 trillion and a CEO who has long been a foreign national, becoming a private company. Additionally, its board of commissioners consists of foreigners who are not proficient in Indonesian. This is also a concern for the OJK because Danamon is a systemic bank.
For some technocrats and adherents of a narrow market-efficiency doctrine, delisting is the prerogative of shareholders. If the costs of stock exchange compliance are deemed too high, or if MUFG’s internal integration requires absolute control free from the disruptions of noisy general shareholder meetings (GSMs), then going private is the logical choice.
However, this is where the fallacy lies. When a large private bank enters the capital market and takes on the “Tbk” designation, it has entered into a social contract with the public. That public status is like laying out strands of cotton under the scorching sun: it must be clean, its fibers clearly visible, and ready to be tested by the winds of public scrutiny. Transparency through strict quarterly financial reports, public disclosure obligations, and the scrutiny of independent analysts are oversight tools that cannot be replaced by any regulator, not even the OJK.
If Danamon—or other major banks—were to actually be delisted in the future (a prospect that is a collective concern of ours), then public oversight would collapse. The bank would once again slip into a soundproof, dark room. True, the OJK would continue to oversee it from the perspective of banking prudential regulations.
However, the history of our financial crises has repeatedly taught us: bureaucratic oversight alone, without the sharp discipline of market oversight (market discipline), often leads to fatal negligence. Public oversight serves as a second line of defense, ensuring that foreign capital does not treat domestic liquidity merely as a subsidiary branch without national roots.
We must not allow Indonesia’s capital market to undergo “de-democratization,” where quality issuers are one by one pulled back into the absolute grip of global corporations, leaving only speculative third-tier stocks for domestic investors.
We must hold Danamon’s management accountable for its commitment to comply with free float regulations—we cannot simply wait for it to happen. The OJK must not be lax either. Do not allow extensions to be granted without clear time limits. If foreign capital seeks to profit from Indonesia’s lucrative domestic market, it must share its “prosperity” with the public through inclusive share ownership and uncompromising transparency.
For when transparency is dimmed, what remains is merely capital accumulation that is deaf to the public interest. It safeguards the “eyes” of public transparency because the bank’s assets are largely owned by the public in the form of Third-Party Funds (TPF). And that, clearly, is not the economic vision we are fighting for. It is not the vision of Prabowo Subianto’s administration regarding economic justice. But it could be the reason for the prolonged failure to meet free float requirements, as shareholders may indeed be consciously seeking to voluntarily delist. This must be stopped.
So, OJK, do not allow Danamon to voluntarily delist. And, OJK knows how to compel Danamon to comply with the regulations.
