The new SOEs Law positions Danantara as the primary "executing agency" for SOE management, while the SOEs minister’s role is limited to oversight through the supervisory board.
he House of Representatives has passed a bill to revise the existing State-Owned Enterprises (SOEs) Law that will set the foundation for the establishment of Danantara, the country’s first SOE superholding company and an investment management agency, akin to Singapore’s Temasek.
The bill will lead the soon-to-be established Investment Authority of Indonesia (IAI) Danantara to work alongside the SOE Ministry to oversee and manage the country’s state-run firms with more than Rp 10 quadrillion (US$609.2 billion) in assets.
IAI Danantara, not to be confused with the Indonesia Investment Authority (INA), will have an initial capital of at least Rp 1 quadrillion.
The agency is set to have full control over SOEs, but the SOEs minister will still hold some authority, including the right to give assignments to SOEs and to conduct investigations into all entities under Danantara, according to a draft revision dated Jan. 16 seen by The Jakarta Post.
The SOEs minister will serve as chairman of Danantara’s supervisory board, overseeing the agency’s key performance indicators.
Moreover, the agency will be responsible for managing dividends from an investment holding company, a main holding company and SOEs it manages, which it can then later use as capital for entities in the agency.
“When the agency makes a profit, a portion may be disbursed as dividends to the state budget, after setting aside provisions to cover investment risks and/or increase capital accumulation,” the draft states.
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