Violations of the Prudential Principle and Fraudulent Practices in Indonesia’s Capital Market: A Case Analysis of OJK Sanctions Against Listed Firms

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

doi:10.70716/ecoma.v3i3.461

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.v3i3.461

Keywords:

Prudential Principle, Capital Market Fraud, OJK Sanctions, Customer Due Diligence, Fraud Pentagon

Abstract

This research investigates how breaches of the prudential principle contribute to fraud within Indonesia’s capital market, focusing on listed entities penalized by the Financial Services Authority (OJK). Utilizing a qualitative multiple-case study approach, the analysis centers on four prominent cases: PT Repower Asia Indonesia Tbk (REAL), PT Multi Makmur Lemindo Tbk (PIPA), PT Bliss Properti Indonesia Tbk (POSA), and PT Mirae Asset Sekuritas Indonesia. Secondary data were gathered from OJK official statements, sanction rulings, national media reports, and legal documents spanning 2022–2025. Through pattern-matching and cross-case synthesis, three recurring violation patterns emerged: inadequate customer due diligence by underwriters, submission of inaccurate information during share subscription and allocation, and lapses in directors’ internal oversight. Fraudulent schemes primarily involved masking true beneficial ownership via nominee structures and offshore vehicles, alongside the fictitious recognition of assets financed by IPO proceeds. OJK’s enforcement strategy demonstrates a tiered, proportionate approach that extends to market intermediaries and, in select instances, crosses national borders. A notable systemic flaw identified is an enforcement delay of up to two years, which may weaken deterrence. The study validates the applicability of the fraud pentagon framework in emerging markets and offers actionable recommendations for enhancing risk-oriented supervision.

Downloads

Download data is not yet available.

References

Abd. Sukor, M. E., Munir, A. F., Ahmad, I., Azeem, A., & Shaharuddin, S. S. (2025). Exuberance, unchecked manipulations, and the behavior of reversals in emerging market economies. SAGE Open, 15(4), 21582440251385691.

Adhi, Y. P., Nugraheni, P. D., Sulistianingsih, D., Rachmitasari, D. I., & Ma'ruf, A. (2025). Law reform of insider trading and market manipulation in legal offer (go public) process. Journal of Law and Legal Reform, 6(2), 1–20.

Ambarwati, S., Astuti, S. B., Sudarmaji, E., & Hubbansyah, A. K. (2020). Event study of IPO in Indonesia: Pump-and-dump and flipping strategy analysis. Journal of Accounting and Finance Management, 1(1), 1–14.

ANTARA News. (2024, June 15). LPEI records 43.5% NPF ratio, OJK cites lack of prudential foundation. https://www.antaranews.com

Azizah, W. (2025). Analisa pengaruh fraud terhadap harga saham di Bursa Efek Indonesia (BEI) (Undergraduate thesis, Universitas Hasanuddin).

CNBC Indonesia. (2025, February 9). OJK ungkap akar utama praktik manipulasi harga saham. https://www.cnbcindonesia.com/market/20250209120042-17-709419/ojk-ungkap-akar-utama-praktik-manipulasi-harga-saham

Cressey, D. R. (1953). Other people's money: A study in the social psychology of embezzlement. The Free Press.

DealStreetAsia. (2025). OJK suspends UOB Kay Hian Sekuritas underwriting licence. DealStreetAsia.

Ekadjaja, M., Rorlen, R., & Siswanto, H. P. (2023). Determinants of underpriced initial stock: A study on the Indonesia stock exchange. International Journal of Accounting and Economics, 1(4).

Emitennews.com. (2025, October 18). BEI kaji penyesuaian free float 30% untuk emiten IPO: Apa dampaknya? https://emitennews.com

European Court of Auditors. (2020). Related parties (ISA 550): Audit methodology. ECA Methodology Portal.

Fariskya, S. N., & Sari, S. P. (2024). The impact of financial performance on initial returns of companies conducting initial public offerings in Indonesia. E-Jurnal Akuntansi, 34(5), 1234–1248.

Financial Industry Regulatory Authority. (2022). Heightened threat of fraud (Regulatory Notice 22-25).

Financial Industry Regulatory Authority. (2025). FINRA fines Goldman Sachs $250,000 over IPO conflict and registration failures.

Garuda TV. (2025, February 9). OJK sapu bersih saham gorengan, 151 emiten dan sekuritas kena denda Rp382 miliar. https://garuda.tv/ojk-sapu-bersih-saham-gorengan-151-emiten-dan-sekuritas-kena-denda-rp382-miliar/

Heriyanto, H., Chen, M., & Lyani, E. (2023). What are the determinants of underpricing in initial public offerings? Evidence from Indonesia. Jurnal Ekonomi dan Bisnis, 1(5).

Insight & Opinion. (2025). Conflict of interest among IPO underwriters: Retail investors ultimately bear the cost. Asia Economic Daily.

International Organization of Securities Commissions. (2023). Market manipulation and cross-border enforcement report. https://www.iosco.org

Kim, K. (2025, May 19). Conflict of interest among IPO underwriters: Retail investors ultimately bear the cost. Asia Economic Daily.

Kusnawirawan, I., Syarkani, Y., Hernayati, H., & Waluyo, I. (2025). Safeguarding investor rights: OJK's regulatory framework including management and challenges in Indonesia's capital market. Jurnal Multidisiplin Indonesia, 4(3). https://doi.org/10.58344/jmi.v4i3.2243

Lincoln, Y. S., & Guba, E. G. (1985). Naturalistic inquiry. SAGE Publications.

Miles, M. B., Huberman, A. M., & Saldaña, J. (2020). Qualitative data analysis: A methods sourcebook (4th ed.). SAGE Publications.

Mirae Asset Sekuritas. (2025, October 15). BEI bakal ubah aturan free float IPO: Ini ulasannya! Mstock.

Nathania, F. (2024). Unveiling the motivation of fraudulent financial statement in ENVY: Fraud triangle theory. Owner: Riset dan Jurnal Akuntansi, 8(1). https://doi.org/10.33395/owner.v8i1.1923

Organisation for Economic Co-operation and Development. (2023). Corporate governance factbook 2023. OECD Publishing. https://doi.org/10.1787/8a9f3c8a-en

Otoritas Jasa Keuangan. (2017). Peraturan OJK Nomor 12/POJK.01/2017 tentang penerapan program anti pencucian uang dan pencegahan pendanaan terorisme di sektor jasa keuangan.

Otoritas Jasa Keuangan. (2025a, February 6). Siaran pers: OJK tetapkan sanksi tegas atas pelanggaran pasar modal oleh PT Repower Asia Indonesia Tbk, PT Multi Makmur Lemindo Tbk, dan pihak lainnya (SP32/GKPB/OJK/II/2025). https://www.ojk.go.id

Otoritas Jasa Keuangan. (2025b, February 9). OJK ungkap akar praktik goreng saham berawal dari penyimpangan IPO. Republika Online. https://ekonomi.republika.co.id

Otoritas Jasa Keuangan. (2025c, March 14). OJK imposes Rp5.6 billion fine over fraudulent PT Bliss Properti Indonesia IPO. Indonesian National Police. http://inp.polri.go.id

Otoritas Jasa Keuangan. (2025d, February 9). OJK ungkap akar utama praktik manipulasi harga saham. CNBC Indonesia. https://www.cnbcindonesia.com

Otoritas Jasa Keuangan. (2025e, March 4). OJK and police raid Mirae Indonesia office over massive capital market fraud. Indonesian National Police. http://inp.polri.go.id

Pamungkas, I. D., Ghozali, I., Achmad, T., Khaddafi, M., & Hidayah, R. (2018). Corporate governance mechanisms in preventing accounting fraud: A study of fraud pentagon model. Jurnal Reviu Akuntansi dan Keuangan, 8(2), 111–124.

Podishetti, A. (2025). Pre-IPO exits at manipulated prices: Evidence from India. The Economic Times.

Pramestie, D. F. (2024). Analysis of the effect of financial ratios on stock underpricing in companies that do IPO on the Indonesia stock exchange (Repository Politeknik Negeri Batam).

Purwanto, S. (2014). The possibility of manipulated IPO underpricing and post-IPO stock return: Empirical study on Jakarta Stock Exchange 2009–2012. Indonesian Capital Market Review, 6(2), 85–98.

Rasji, R. (2025). Legal proof of capital market manipulation in Indonesia: Case 34/Pid.Sus-TPK/2020/PN.Jkt.Pst analysis. Jurnal Daulat Hukum, 8(3), 1–14.

Reinhart, R. A. (2024). Detecting financial statement fraud using the fraud pentagon theory: A study of financial sector companies in Indonesia. International Journal of Business, Economics and Law, 29(1), 45–58.

Republika Online. (2025, February 9). OJK ungkap akar praktik goreng saham.

Ritter, J. R. (2023). Initial public offerings: Updated statistics and analysis. University of Florida.

Sagala, I. C., Sirait, D. A. P., & Sitorus, R. N. (2024). The influence of pentagon fraud on fraudulent financial reporting in companies registered on the IDX BUMN20 Indonesia stock exchange for the 2020–2022 period. Information Management and Business Review, 16(3), 188–195.

Simamora, M. B., & Juliarto, A. (2025). Analisis kecurangan pelaporan keuangan dengan perspektif fraud pentagon pada perusahaan sektor tambang di Indonesia tahun 2020–2023. Diponegoro Journal of Accounting, 14(2).

Sulistyandari, Afwa, U., Sutrisno, P. A., & Nordin, R. (2024). Implementation of prudential banking principles: State responsibility in combating banking crimes in Indonesia. Volksgeist: Jurnal Ilmu Hukum dan Konstitusi, 7(2), 341–359. https://doi.org/10.24090/volksgeist.v7i2.12132

Tempo.com. (2024, October 25). Poor management of the stock exchange. Tempo.com.

The Jakarta Post. (2024, October 15). OJK revokes Investree's license over equity shortfall. https://www.thejakartapost.com

The Jakarta Post. (2025, September 20). Investree founder repatriated from Qatar, faces IDR 2.7 trillion illegal fundraising charges. https://www.thejakartapost.com

U.S. Securities and Exchange Commission. (2023). Investor alert: Social media and stock manipulation. https://www.sec.gov

Vousinas, G. L. (2019). Advancing theory of fraud: The S.C.O.R.E. model. Journal of Financial Crime, 26(1), 372–381.

Wolfe, D. T., & Hermanson, D. R. (2004). The fraud diamond: Considering the four elements of fraud. The CPA Journal, 74(12), 38–42.

Yin, R. K. (2018). Case study research and applications: Design and methods (6th ed.). SAGE Publications.

Yusuf, F., Rochayatun, S., & Kartikasari, N. (2025). A moderation institutional ownership impact on fraudulent financial reporting: Fraud pentagon theory perspective. Proceedings of the International Conference of Islamic Economics and Business (ICONIES), 11(1), 583–596. https://conferences.uin-malang.ac.id/index.php/iconies/article/view/3440