COO: Danantara Is Not 1MDB, SOE and Investment Risks Are Separated
Chief Operating Officer (COO) of the Daya Anagata Nusantara Investment Management Agency (Danantara Indonesia) Dony Oskaria has asserted that the institution’s structure is designed differently from investment management schemes such as 1Malaysia Development Berhad (1MDB). Since its inception, Danantara has implemented a strict separation between the management of State-Owned Enterprises (SOEs) and investment activities to mitigate risk.
Dony stated that public concerns comparing Danantara to 1MDB arose due to the consolidation of SOE assets accompanied by an investment function within a single entity. However, he stressed that Danantara was designed with a distinct governance mechanism through the separation of asset management and investment functions.
“From the beginning of designing Danantara, we had already thought that there must be a separation of risk between SOE management and investment. Because investment can fail, it can succeed,” Dony said in the Bukan Kaleng Kaleng podcast, quoted on Thursday (11/6).
According to him, without such separation, investment failure could potentially have a direct impact on the performance of state-owned companies that serve as the backbone of the national economy. “You can imagine if we invest and the investment fails, it could drag down the SOEs. That is why from the start we designed it, we split it,” Dony explained.
Dony elaborated that Danantara has two main pillars. First, Danantara Asset Management, which functions as a consolidator and manager of the SOE portfolio. Second, Danantara Investment Management, which acts as the investment arm to place funds in productive projects.
He added that the source of funds used for investment does not come from the core assets of the SOEs, but rather from the dividends generated by the state companies under the management of Danantara Asset Management. “What is invested is the dividends. So, the dividends generated by Danantara Asset Management are invested in productive things to accelerate our economic growth,” Dony said.
Therefore, Dony emphasised that Danantara’s success is highly dependent on the quality of SOE management. The better the performance of the state companies, the larger the dividends that can be utilised to support investment and national economic growth. “This means that SOE management is the key word for Danantara’s sustainability. If we mismanage the SOEs, Danantara will certainly be gone. Because the key to what is invested is the result of SOE management,” he concluded.