Indonesia's richest tycoon's fortunes have plummeted by nearly $22 billion, equivalent to around RM86.46 billion, as investors reacted to an MSCI Inc report questioning the basis of stock valuations and the transparency of the ownership structure of listed companies in the country.
The most affected individual was Prajogo Pangestu, Indonesia's richest person, when his net worth fell by about $9 billion (RM35 billion) after shares in his energy and mining companies recorded a sharp decline.
His wealth is now estimated at around $31 billion, with total losses this year reaching almost $15 billion.
The massive sell-off was triggered after MSCI released a report raising questions about shareholder reporting regulations in Indonesia, which are believed to create an opaque ownership structure and potentially open up space for improper trading activities.
The statement exacerbated existing concerns about overly concentrated shareholdings, which have underpinned much of the wealth of tycoons in Indonesia and other Asian markets.
MSCI also said it would delay some planned index changes and warned that further action could be taken if the issue was not addressed by May.
The Jakarta Stock Exchange Composite Index closed down more than 7% on Wednesday and fell as much as 10% on Thursday.
Haryanto Tjiptodihardjo also lost nearly $3 billion in two days after shares in his plastics maker Impack Pratama Industri Tbk PT fell 15%.
Several other tycoons, including banker Michael Hartono and coal miner Low Tuck Kwong, also saw their wealth plummet.
Bloomberg data shows Indonesian billionaires in the World's 500 Richest People Index hold stakes ranging from a few percent to more than 90% in their companies, compared with a minimum free float requirement of just 7.5% for listed companies in Indonesia.
Global investors have long urged Indonesian authorities to tighten corporate reporting rules, as most listed companies are controlled by individuals or entities, with small floating share counts.
This raises the risk of sharp price fluctuations and concerns about market manipulation.
MSCI said it would consider additional measures, including possibly reducing the weight of all Indonesian companies in its emerging market indices, if no significant progress is made by May.
