Two Indonesian football clubs have reportedly expressed their interest to tap the capital markets to raise funds, an Indonesian Stock Exchange (IDX) director told reporters in Jakarta recently.
Tito Sulistyo, president director of IDX said that he has asked the Institute of Indonesia Chartered Accountant (IAI) to “look into the matter”.
Indonesia’s capital market is still shallow and in need for major reforms across the board. The interest by football clubs may be prompting authorities to take steps in this direction.
While going public seems like a golden opportunity to glamorise the capital market again, and, at the same time, marking the comeback of Indonesian football industry, there are many challenges to address. For one, teams are expected to improve their accounting, governance and transparency standards.
“The problem is that they (local clubs) put players’ salaries as expenses contrary to that is done abroad where wages are considered an asset. We have asked the IAI to outline a new set of specific rules for our local clubs,” he explained, as quoted by local media.
Entry of football clubs – a much loved sport in Indonesia – into the capital market could galvanise the sector again, and Sulistyo would love to see it happen under his watch.
In 2012, Persib Bandung Bermartabat (PBB), the manager of a local football club had once declared its plan for an IPO. It had appointed Mandiri Sekuritas, Bahana Sekuritas, and Buana Capital to arrange the shares offering. It had even targeted Rp 200 billion ($15 million) from the fundraising.
The plan crashed, however, when turmoil and scandal hit the Indonesian football industry, leading FIFA to ban local clubs from participating in any international events not long after.