The Jakarta Post
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.
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)