Deviations in the Initial Public Offering (IPO) Process as the Root of Stock Price Manipulation: A Case Study of Issuers in Indonesia for the 2020–2025 Period

Dewa Putu Yohanes Agata L. Sandopart; Lie Adek; Dewa Ayu Indiana Ida Loemongga Sandopart; Erma Wijayanti

doi:10.70716/ecoma.v4i1.459

Authors

Dewa Putu Yohanes Agata L. Sandopart Faculty of Economics, Institut Bisnis dan Informatika Kosgoro 1957, Indonesia
Lie Adek Nautical Department, Akademi Maritim Nasional Jakarta Raya, Indonesia
Dewa Ayu Indiana Ida Loemongga Sandopart Faculty of Economics and Business, Universitas Terbuka, Indonesia
Erma Wijayanti Faculty of Economics, Institut Bisnis dan Informatika Kosgoro 1957, Indonesia

DOI:

https://doi.org/10.70716/ecoma.v4i1.459

Keywords:

IPO, Stock Price Manipulation, Pump-and-Dump, Capital Market Governance, Law Enforcement

Abstract

This study analyzes deviations in the Initial Public Offering (IPO) process as the root of stock price manipulation among issuers in Indonesia for the 2020-2025 period. Using a qualitative approach with a multiple case study method, this research examines three issuers sanctioned by the Financial Services Authority (OJK): PT Berkah Beton Sadaya Tbk (BEBS), PT Repower Asia Indonesia Tbk (REAL), and PT Multi Makmur Lemindo Tbk (PIPA). Data were collected through in-depth interviews with 12 informants consisting of former OJK/Indonesia Stock Exchange (IDX) officials, capital market practitioners, academics, investigative journalists, and legal practitioners, as well as document analysis of prospectuses, financial statements, and OJK documents. The results identify four forms of IPO deviations: manipulation of material fact information, share allotment engineering, due diligence procedure violations, and discrepancies in the use of IPO funds. The BEBS case demonstrates how IPO deviations create structural conditions that facilitate pump-and-dump schemes through 57 nominee accounts, generating manipulative profits of IDR 14.5 trillion. This study identifies five factors causing weak detection and prevention: regulatory factors, law enforcement, corporate governance, market structure, and economic incentives. These findings confirm the OJK's statement that the root of stock price manipulation originates from deviations in the IPO process and emphasize the need for stronger supervision and enforcement.

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