Indonesia's financial regulator has launched a sweeping investigation into investment banks, targeting UOB Kay Hian and units of Mirae Asset and Shinhan Bank for alleged governance failures and market manipulation. The crackdown follows a January MSCI warning that could downgrade Indonesia to a frontier market due to opaque shareholding and potential co-ordinated trading. Authorities accuse the banks of facilitating 'sahem gorengan' (deep-fried stocks) through poor due diligence and insider transactions, inflating IPO prices. Mirae Asset's 2020-21 IPO saw a 7,150% share price surge linked to pseudo transactions.

Indonesia's OJK has suspended UOB's underwriting license for a year and fined Rp250mn ($14,800) for providing incorrect investor data. Experts warn enforcement must extend beyond smaller firms to include major tycoons controlling mid-cap and blue-chip stocks.