BPK wants greater jurisdiction over SOEs
BPK wants greater jurisdiction over SOEs
Tony Hotland, Jakarta
The Supreme Audit Agency (BPK) wants greater authority in
auditing publicly listed state-owned enterprises (SOEs), and that
appointed public accountants consult the agency first before
conducting an audit.
"The problem is how to ensure that the public accountants'
audit covers public interests and company information required by
legislators," BPK chairman Satrio "Billy" Joedono said on Friday.
"The BPK is not sure that public accountants actually audit
the vital sections. We'll be more pleased if they consult us
first on auditing standards and principles to ensure the audits
cover the essential parts," he explained.
He said the BPK had made the request during the deliberation
of the draft law on state financial accountability, along with
another: that the agency be allowed to audit all state companies
-- both listed and unlisted -- even if the government held only a
minority share in the companies.
Governmental officials and legislators initially rejected the
request, saying it would conflict with Law No. 8/1995 on capital
markets, which stipulates that listed companies be audited by
public accountants.
They later reached a compromise to include an article that
state-owned firms must submit their financial reports to the BPK
for review after being audited by public accountants.
The House was to have passed the draft into law early this
week, but had to postpone its enactment due to poor legislator
attendance.
Billy expected the House to review the bill to accommodate the
BPK's requests before it was enacted.
BPK auditor Amrin, who accompanied Billy to the weekly press
conference, cited the case of ailing pharmaceutical firm PT
Indofarma as one which underlined the necessity for the BPK to
audit listed state-owned companies.
He said Indofarma refused to be audited by the agency after
the government pared its ownership to 81 percent and sold the
remaining shares to the public.
The firm suffered a hefty loss of Rp 129 billion (US$13.72
million) last year despite an earlier projection by the
management that it would make a big profit, based on the
assumption of a huge existing stock of medicines and medical
tools. Auditors found, however, that the medicines had expired
and the medical tools were useless.
"Now you see what has happened to the company. Even though it
became a publicly listed company, it still holds the government's
money and so should be audited by the BPK," he said.
The government plans to merge Indofarma with another state
owned drug firm, PT Kimia Farma, which is financially healthy, as
part of a dual divestment program.
Meanwhile, Billy said the House had asked the BPK to audit the
two companies prior to divestment.
"Actually, such a request conflicts with the (capital market)
law. In any case, it's up to the House and the government. We'll
just wait," he said.