Dony Oskaria Assures Danantara Will Not Share 1MDB's Fate

Chief Operating Officer of the Daya Anagata Nusantara Investment Management Agency (Danantara Indonesia), Dony Oskaria, has asserted that Danantara was not designed like 1 Malaysia Development Berhad (1MDB), and that the risks of state-owned enterprises (BUMN) and investments have been separated. “The institutional structure of Danantara is designed differently from investment management schemes like 1 Malaysia Development Berhad (1MDB),” Dony said in a statement in Jakarta on Thursday. He explained that since its inception, Danantara has implemented a strict separation between BUMN management and investment activities to mitigate risk. Dony noted that public concerns comparing Danantara to 1MDB arose because of the consolidation of BUMN assets accompanied by an investment function within a single entity. However, he stressed that Danantara has been designed with a different governance mechanism through the separation of asset management and investment functions. “From the beginning of designing Danantara, we already thought that there must be a separation of risk between BUMN management and investment. Because investment can fail, it can yield results,” Dony stated. According to him, without this 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 invest and the investment fails, it could drag down the BUMN. That is why from the start we designed it this way, we split it,” Dony explained. Dony elaborated that Danantara has two main pillars. First, Danantara Asset Management, which functions as a consolidator and portfolio manager for BUMNs. Second, Danantara Investment Management, which acts as the investment arm to place funds into productive projects. “Danantara Asset Management as the consolidator of BUMNs, and Danantara Investment Management as its investment arm,” he continued. He added that the source of funds used for investment does not come from the core assets of the BUMNs, but rather from the dividends generated by the state-owned 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 ventures to accelerate our economic growth,” he clarified. Therefore, Dony emphasised that Danantara’s success is highly dependent on the quality of BUMN management. The better the performance of the state-owned companies, the larger the dividends that can be utilised to support investment and national economic growth.