COO: Danantara is not 1MDB; SOE and investment risks are segregated

Chief Operating Officer of the Daya Anagata Nusantara Investment Management Agency (Danantara Indonesia), Dony Oskaria, has affirmed that Danantara was not designed like 1 Malaysia Development Berhad (1MDB), as the risks of state-owned enterprises (BUMN) and investments have been separated. “Danantara’s institutional structure is designed differently from investment management schemes like 1MDB,” Dony said in a statement in Jakarta on Thursday. He stated that since its inception, Danantara has implemented a strict separation between the management of state-owned enterprises and investment activities in order to mitigate risk. Dony said some public concern comparing Danantara to 1MDB arose because of the consolidation of SOE assets accompanied by an investment function within a single entity. “From the very beginning of designing Danantara, we were already thinking that there must be a segregation of risk between managing SOEs and investing. Because investment can fail, and it can yield returns,” Dony said. He noted that without such separation, an investment failure could potentially have a direct impact on the performance of the state-owned companies that form the backbone of the national economy. “You can imagine if we were to invest and the investment failed, it could drag down the SOE. That is why from the outset we designed it this way; we split it,” Dony concluded.