No other state-owned firms to be sold to foreign entities: Minister

State-Owned Enterprise Minister Dahlan Iskan said that selling state-owned firms to foreign companies was an outdated approach that would never happen again.

“The selling of state-owned firms, such as Indosat and Telkomsel, took place because the government had no money to support the state budget. The size of our economy now dominates about 51 percent of the Southeast Asia region. It is our time now to buy stakes in other countries’ companies,” Dahlan told journalists at his office on Monday.

By the end of 2002, the government had sold a 41.94 percent stake in telecommunication company PT Indosat to Singapore Technologies Telemedia Pte.Ltd., which is owned by investment firm Temasek Holdings.

Criticism quickly surfaced as Indosat is considered one of Indonesia’s most valuable assets. Moreover, the holding, through its subsidiary Singapore Telecommunication (Singtel), had previously purchased a 35 percent stake in Indonesia’s largest telecommunication company, PT Telkomsel.

Dahlan said, however, that foreign companies would still be able to acquire and hold shares in Indonesian companies through traded stocks.

“We cannot forbid share trading in the capital markets,” he said.

Dahlan also said that his ministry would encourage a mechanism where domestic investors would be majority purchasers of shares during future state-owned enterprise initial public offerings (IPOs).