Privatization needs firm working relationship<\/p>\n
JAKARTA (JP): An effective and clear-cut working relationship
\nwithin management systems in an absolute must in the process of
\nprivatizing state-owned companies.<\/p>\n
This is particularly true in terms of authorization and
\nallocation of authority for decision making, a noted corporate
\nlawyer commented yesterday.<\/p>\n
\"There must be a formal regulation for top-down working
\nrelationships in the state-owned companies,\" Prof. Dimyati
\nHartono said yesterday.<\/p>\n
There must be an explicit basic regulation, governing the
\nauthority, as well as the responsibility of every management
\nlevel, he told The Jakarta Post.<\/p>\n
Citing an example of the Rp 1.3 trillion (US$620 million) loan
\nscandal at the state-owned Bank Pembangunan Indonesia (Bapindo),
\nDimyati said that the debacle would not have happened if the
\nbank's directors had made a legitimate decision to extend the
\nloan to businessman Eddy Tansil.<\/p>\n
\"The bureaucracy was involved far too much in the bank's
\nbusiness policies,\" he said.<\/p>\n
Dimyati, who was formerly an expert staff member to the
\nMinister of Tourism, Post and Telecommunications, said there are
\ntwo types of state-owned companies in practice; the public
\ncompany (Perum) and the limited company (PT).<\/p>\n
He said either type has its directors under the government's
\nsupervision and control.<\/p>\n
In a public company, the directors must obey the decisions
\nmade during the company's shareholders meetings, while in a
\nlimited company, they must obey the company's statutes, which
\nconstitute a collection of rules set out by its board of
\ncommissioners, Dimyati said.<\/p>\n
He said he could understand the difficulties the Bapindo
\ndirectors encountered in approving or rejecting Tansil's loans.<\/p>\n
\"Lawfully, they could not reject a minister's call for banking
\npolicy changes,\" he said, adding that in such a case the minister
\nwas virtually the bank's \"owner and shareholder\", as well as the
\none who appointed them as directors.<\/p>\n
Furthermore, there was a letter of reference from a top
\ngovernment official, which more or less influenced the directors'
\ndecisions, he said.<\/p>\n
Dimyati, also a member of the board of commissioners at the
\nstate-owned telecommunications company (PT Telkom), said two
\nfactors, productivity and consistency, should be taken into
\nconsideration in the privatization of state-owned companies.<\/p>\n
A state-owned company, which plans to go public, should see to
\nit that the privatization results in the high level productivity
\nof the company with a lower price for the company's products, he
\nsaid.<\/p>\n
The effect should not be the opposite, in which a state-owned
\ncompany sells its products at higher prices than before it went
\npublic.<\/p>\n
Also, he said, the state-owned company must be consistent in
\ndealing with foreign investors.<\/p>\n
\"Based on my experience, managements often have broken
\nagreements they reached with partners,\" he said. (imn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/privatization-needs-firm-working-relationship-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}