Police Crackdown on Stock Manipulation Marks Shock Reform for Indonesia Market

JAKARTA, Investortrust.id — Indonesia National Police financial crimes unit names new suspects on Tuesday, Feb 3, 2026 in Jakarta as part of an expanded crackdown on stock manipulation tied to PT Multi Makmur Lemindo Tbk or PIPA, a move authorities frame as a shock reform to restore market integrity after severe volatility.

The investigation is led by the Criminal Investigation Department (Bareskrim) through its Economic and Special Crimes Directorate, targeting alleged IPO fraud, insider trading, and artificial price formation that authorities say distorted investor perception.

Police formally name three new suspects in the PIPA case, identified as BH, a former evaluation officer at the Indonesia Stock Exchange, DA, a financial adviser, and RE, a project manager at the issuer.

Director of Economic and Special Crimes Ade Safri Simanjuntak says investigators find the company was fundamentally unfit to list but allegedly manipulated asset valuations to meet IPO requirements and raise Rp 97 billion, equal to $6 million, from the public.

“This is already a further development of a case that has obtained final legal force,” Ade Safri says, adding that the suspect from the exchange had been dismissed from his position.

The case also exposes alleged coordination between internal exchange personnel and a private consulting firm previously linked to a convicted defendant, misleading retail investors about the issuer true financial condition.

As part of the probe, police raid the Jakarta office of Shinhan Sekuritas Indonesia, the underwriter for the PIPA IPO, seizing documents related to alleged capital market crimes and money laundering.

“This company acted as the underwriter during the IPO process at that time,” Ade Safri says, noting the search aims to collect evidence to strengthen the criminal case.

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The police escalation comes as a parallel investigation unfolds at Narada Asset Management, where authorities allege insider trading and mutual fund manipulation using internally controlled project stocks as underlying assets.

“In this case, investigators have uncovered alleged facts that the underlying assets of mutual fund products originated from project shares controlled by internal parties,” Ade Safri says.

Police say the transactions were structured to create artificial demand and distorted prices that did not reflect fundamental value, misleading retail investors.

“These findings indicate market manipulation practices that generate artificial demand, price distortion, and a non real perception of portfolio performance,” Ade Safri says.

Authorities have named two suspects in the Narada case and blocked and seized securities sub accounts worth approximately Rp 207 billion, equal to $13 million, based on October 2025 valuations.

The criminal investigations reinforce earlier regulatory action by the Financial Services Authority, which fined Narada Asset Management Rp 4.6 billion in 2023 for multiple violations, including the absence of standard operating procedures for research, trading, risk management, and compliance.

Individual executives and staff were also fined and barred from capital market activity, with penalties reaching Rp 1.2 billion and a five year ban for the company president commissioner.

The enforcement surge follows a sharp selloff in the Jakarta Composite Index triggered by a temporary freeze of Indonesia index reviews by MSCI, an episode that exposed governance weaknesses and sparked resignations across market institutions.

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Police confirm several similar cases are under active investigation, signaling that the crackdown will not stop with a single issuer or asset manager.

“This concerns public interest,” Ade Safri says. “Market abuse does not only harm investors, but damages trust in the national financial system.”

Senior government officials have publicly backed law enforcement action as part of a broader reform agenda to clean up so called fried stocks and restore investor confidence.

The police offensive now stands as the most visible pillar of Indonesia shock reform strategy, combining criminal prosecution with regulatory tightening to reset market credibility after one of the most turbulent episodes in recent years.