State firms not above the law, Mar'ie warns<\/p>\n
JAKARTA (JP): Minister of Finance Mar'ie Muhammad stressed
\nhere yesterday that the management of state-owned companies on
\nthe domestic stock exchanges are not exempt from the Indonesian
\nCapital Market Law.<\/p>\n
\"Directors and commissioners of publicly-owned companies,
\nwhether or not they are state-owned, may be sued for damages
\nrelated to violations of the law,\" the minister said in his
\nspeech at an Indonesian capital market forum.<\/p>\n
Mar'ie said that being a majority shareholder, the government
\nstill has indirect control over listed state-owned companies but
\nhe added that such control would not eliminate the principles of
\ndisclosure.<\/p>\n
Partial listing would, therefore, still have a significant
\nimpact on the efficiency of the management because being listed
\non a capital market, state-owned companies must also disclose
\nmaterial facts pertaining to their operations.<\/p>\n
In the two-day capital market forum, organized by Euromoney,
\nthe minister said that questionable policies would be slated in
\nthe international financial press, and be reflected in the share
\nprice. Therefore, management will be motivated to perform in the
\ninterests of the shareholders.<\/p>\n
The government began its privatization program in the 1980s
\nwith a number of schemes: Build-Operate-and-Transfer, Build-and-
\nOwn, Contract-Management, Joint-Operation and Direct-Placement,
\nas well as share flotation on stock exchanges.<\/p>\n
He said that a number of state-owned companies are now being
\nprepared to go public both on local and foreign stock exchanges.
\nThese include Bank Negara Indonesia (BNI), state-owned harbor
\nmanagement firm PT Pelindo II, PT Krakatau Steel, toll road
\noperator PT Jasa Marga, PT Rajawali Nusantara Indonesia, PT
\nGaruda Indonesia, subsidiaries of state-owned electric company PT
\nPLN and plantation firm PT Perkebunan Nusantara.<\/p>\n
The minister hoped that the public offerings of those eight
\ncompanies would be as successful as those by PT Indosat, PT
\nTelekomunikasi Indonesia (Telkom) and PT Tambang Timah.<\/p>\n
Mar'ie said privatization through share offers on the capital
\nmarket is considered the best approach, because the fairest price
\nis obtained.<\/p>\n
\"That also leads to transparency and the democratization of
\ncapital,\" he said in the forum, which will end today.<\/p>\n
Speakers of yesterday's meeting included Chairman of the
\nCapital Market Supervisory Agency (Bapepam) I Putu Gede Ary Suta.<\/p>\n
Major source<\/p>\n
In his paper, Putu said that foreign investment is a major
\nsource of funding for Indonesian capital markets as local
\ninvestors are still fairly thin on the ground.<\/p>\n
He said that the low participation of local investors is
\npartly a result of the low financial capability of local
\nsecurities companies.<\/p>\n
Direct investment in the securities industry by international
\ninvestment firms is therefore encouraged, to support domestic
\nstock trading activities, he added.<\/p>\n
\"By inviting international securities firms to help develop
\nthe domestic market, we obtain vital funding and facilitate the
\nrapid transfer of capital market technology,\" he said.<\/p>\n
Putu noted that with access to international investment
\nhouses, young Indonesians working in the security industry will
\nhave ample opportunity to acquire the specialized knowledge and
\nexperience needed to run their owned securities companies.(hen)<\/p>",
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"sponsor": "Okusi Associates",
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