MSCI has removed two Indonesian stocks linked to wealthy tycoons from its indices, following concerns about ownership concentration that triggered the country's worst stock market rout in years. Barito Renewables and Dian Swastatika Sentosa were deleted after Indonesian authorities flagged them among companies with tightly held share structures.

The deletions sent shockwaves through Jakarta trading. Barito shares dropped 8 per cent on Tuesday while DSS tumbled 14 per cent, dragging the broader Jakarta Composite down 1 per cent. The market has hemorrhaged nearly $190bn since MSCI warned in January it could downgrade Indonesia from emerging to frontier market status. The index provider will now decide on Indonesia's status in June instead of May.

Indonesia's exchange revealed that limited shareholders control 97.3 per cent of Barito Renewables, owned by Prajogo Pangestu, and 95.76 per cent of DSS, linked to the Widjaja family's Sinar Mas conglomerate. Jakarta has raised the minimum free float to 15 per cent and tightened disclosure rules, giving companies three years to comply. Indonesia's financial regulator is investigating potential misconduct including market manipulation.