Measure to Shine Light on State Firms Delayed
Faisal Maliki Baskoro
The State-Owned Enterprises Ministry’s plan to make state oil and gas company Pertamina a non-listed public company has been delayed until next year because the government has yet to finalize regulations for such firms.
“The government is formulating regulations for state companies that are going to become non-listed public companies,” Muhammad Said Didu, secretary to the state-owned enterprises minister, said on Tuesday.
Non-listed public companies will remain state-owned but follow the Indonesia Stock Exchange’s disclosure guidelines and issue quarterly financial results and annual reports.
The intention is to increase their transparency.
For two years the ministry has been discussing making Pertamina its first non-listed public company due to its stature as one of the biggest state companies and because it is often accused of corruption and inefficient management.
But with the plan on hold, it appears Pertamina will be just one of many in the first wave of non-listed public companies.
“Not only Pertamina will become such a company,” the secretary said. “The goal of this is to make as many SOEs as possible as open as possible.”
He said the government expected the regulations to be finalized sometime next year.
According to Didu, the Ministry of Finance and the State-Owned Enterprises Ministry are still deciding on the criteria for determining which state-owned enterprises will become non-listed public companies.
“One of the criteria we are discussing is the amount of assets a company should hold,” he said. “However, the amount of assets does not always reflect a company’s readiness to become a non-listed public company.”
Didu said state-own companies had average assets of Rp 20 trillion ($2.22 billion).
“If we use [Rp 20 trillion as the threshold], many state companies will qualify,” he said.
“That’s good, but most of them are not ready to become non-listed public companies. But if we set Pertamina’s assets [around Rp 150 trillion] as the benchmark, it would be too high.”
Didu also said the government would exclude state-owned enterprises related to national security, namely arms contractor Pindad, plane manufacturer Dirgantara Indonesia and ship builder PAL.
But he said the delay would not set back the ministry’s broader plans to promote transparency as there were other available measures, such as encouraging state-owned enterprises to issue bonds.
“By doing that they would naturally open themselves up for scrutiny in order to attract investors,” Didu said.