BCA stocks unmoved by KPK’s tax case

JAKARTA. The tax crime case entangling publicly listed lender Bank Central Asia (BCA) seems to be having little effect on the performance of its shares, analysts say.

According to Bahana Securities deputy research head Teguh Hartanto, its shares have not been significantly affected by the news, as shown by Indonesia Stock Exchange (IDX) data.

BCA’s shares — traded under the code BBCA — opened at Rp 10,950 (94 US cents) on Tuesday, down 1.8 percent from the closing price on Monday when the tax case broke.

However, they managed to bounce back and ended at Rp 11,050 on Tuesday, rising 0.9 percent from the opening price.

The same occurred on Wednesday when shares opened lower than the previous day’s closing price. 

They opened at Rp 10,900, but climbed 1.4 percent to close at Rp 11,050. “Overall, its shares only fell 1.1 percent from when the tax case was made public,” Teguh said.

“I don’t think the situation has turned severe for the bank,” he said.

He added that it would begin to look stark for BCA if its share price plunged more than 10 percent.

Teguh acknowledged that he had downgraded his recommendation for the shares, to “hold” from “buy”, but argued that the change was mainly triggered by the shares’ already-high price. 

The target price, he added, had been set at Rp 11,500.

Teguh said that he suspected the next few days would still be relatively smooth for BCA’s shares, unless the Corruption Eradication Commission (KPK) came up with another unexpected development.

“But that is unlikely to happen in my opinion because BCA is known as a blue chip company with good corporate governance practices, and if it is ordered to repay the Rp 375 billion in state losses, it will not seriously injure the bank’s business,” he said, citing BCA’s “robust” profits.

Last year alone, the lender — part of the conglomerate Djarum Group — brought home Rp 14.25 trillion in net profits, a 21.6 percent increase from a year before.

Separately, Universal Broker research head Satrio Utomo voiced an opinion similar to that of Teguh’s, saying that the shares were unlikely to fall below Rp 11,000.

“If we observe closely, BCA’s shares have never declined for too long. Shortly after they fall, they will bounce back,” he said. 

“It seems that there’s a certain party that immediately enters the market to maintain the price level.”

Satrio said that the shares had the potential to undergo a price correction in the near future, but it would mostly be driven by regional changes.

As previously reported, the KPK named Hadi Poernomo, former Finance Ministry director general of taxation, a suspect in a tax crime case. 

Hadi allegedly played a role in providing tax leniency to BCA back in 2004 that caused potential tax losses of Rp 3.45 trillion.

The case began when BCA fielded a request with the income tax directorate on July 12, 2003, for income tax leniency as a result of bad loan restructuring worth Rp 5.7 trillion in 1999.

After a year of evaluation, the directorate general announced on March 13, 2004 that it had turned down the request. 

However, KPK chairman Abraham Samad said that one day before the deadline was due for BCA to pay the taxes, the decision was annulled.

“HP [Hadi Poernomo], in his capacity as director general of taxation, annulled the decision and granted BCA’s request […] Of all the banks that applied [for similar treatment], only BCA was granted the privilege,” he said.

BCA management held a press conference on Tuesday, denying any wrongdoing and insisted that everything had been done in compliance with the taxation law. (Tassia Sipahutar)