TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
SOEs holding regulation not in line with laws, says economist
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
State-Owned Enterprises Minister Rini Soemarno (right) talks to a staff member before a press conference following a Cabinet meeting at the Presidential Office. (Antara/Widodo S. Jusuf)
A
new regulation that has become a legal basis for the establishment of state-owned enterprise (SOE) holdings has faced criticism as it is not believed to be in line with existing laws, an analyst has said.
Government Regulation (PP) No. 72/2016 on procedures for state capital injections into SOEs states that the inbreng rule, in which the assets of one company are transferred to another and treated as a capital injection, is not regulated by the SOEs Law as a source of capital injection for SOEs, said Indef economist Mohammad Reza H. Akbar, as reported by kontan.com.
According to Article 2A, paragraph 1 of PP No. 72/2016, capital injections for state assets in the form of shares owned by a certain SOE being moved to another SOE was carried out without passing through state budget mechanisms, Reza said.
(Read also: Energy, mining, financial services holdings to be formed first: SOE minister)
Such a mechanism ignored the supervisory function of the Supreme Audit Agency (BPK) over SOEs, he added. “The article cannot become a legal basis for the capital injection because it is against the SOEs Law and State Finance Law,” he said.
In addition, the SOEs Law and PP No. 44/2005 did not regulate SOEs’ subsidiaries and their business derivations, he said, adding that “therefore, it needs a new law to regulate the matter”, not Article 2A, paragraphs 2, 6 and 7 of PP No. 72/2016.
However, SOEs Minister Rini Soemarno insisted that the rulings on PP No. 72/2016 were in line with laws on state finance, SOEs and the state treasury. (bbn)
