KUALA LUMPUR, Oct 31 — Indonesian President Prabowo Subianto’s brother has stressed the urgent need for transparency in the domestic equity market, warning that Jakarta must “mitigate the MSCI issue” and demanding that corporate leaders immediately stop “deep frying” stocks.

“I’ve been tasked by the president to help ensure this doesn’t spiral out of control,” Hashim Djojohadikusumo said in Jakarta, speaking in his capacity as the president’s special envoy and advisory board chairman of the Indonesian Chamber of Commerce and Industry (Kadin), according to Bloomberg.

“This is a very, very serious issue,” Hashim said. “Because if foreign investment pulls out of our stock market, the rupiah could weaken further. We’ll have to pay more for our foreign loans. This could become a disaster and catastrophe for the Indonesian economy.”

US index compiler MSCI Inc warned earlier this month that Indonesia could face a downgrade to standalone status, a severe sanction triggered by mounting concerns over opaque shareholding structures and coordinated trading in Southeast Asia’s largest economy.

The warnings have hammered sentiment on the Indonesia Stock Exchange, where the benchmark index has tumbled roughly 41 per cent this year, weighed down by a 3.5 per cent slide on Thursday.

In response to MSCI’s October 15 notice, Indonesia’s Financial Services Authority (OJK) announced penalties against more than a dozen entities involved in market manipulation. OJK head Friderica Widyasari Dewi confirmed on the sidelines of the Kadin forum that sanctioned firms have since paid IDR2.1 trillion (RM512 million) in fines, though the regulator has yet to disclose their identities.

Hashim addressed an audience comprising hundreds of business figures, including tycoons Anindya Bakrie and Franky Widjaja. Widjaja is the ultimate controlling shareholder of PT Dian Swastatika Sentosa, one of the entities under regulatory scrutiny.

His warning came days after President Prabowo asserted that “the Indonesian nation is not afraid of anyone and will not be intimidated.”

Hashim pressed market players to halt the local equivalent of saham gorengan, the coordinated churning and ramping of share prices detached from corporate fundamentals.

“Please stop deep frying stocks immediately because the government intends to take firm action,” Hashim said, cautioning that capital outflows triggered by a potential double downgrade could push the rupiah to 22,000 per US dollar. “This would have an extraordinarily negative political impact.”

Bank Indonesia Governor Destry Damayanti told reporters at the gathering that currency fluctuations reflect multiple dynamics, including global market sentiment. She noted that the central bank remains focused on ensuring currency stability to support real-sector expansion, emphasising that the rupiah is backed by solid underlying fundamentals.

Hashim added that the protracted equity slump directly hurts retail investors across the archipelago.

“There are 32.7 million Indonesian citizens who hold brokerage accounts — in other words, they’re investing through the stock market,” he said. “Well, the problem is that right now, those 32.7 million Indonesians are extremely dissatisfied with the situation. They’re unhappy because the value of their stocks has dropped.”

Hashim, an established conglomerate head who has long served as Prabowo’s key financial and political strategist, played a pivotal role in backing his brother’s path to the presidency.