Govt tightens control on state firms

Govt tightens control on state firms

JAKARTA (JP): The Ministry of Finance yesterday issued a new ruling that imposes tighter controls on the widely criticized operations of state-owned companies.

Ruling No. 489/KMK.016/1995, effective immediately, requires state-owned companies to separate their annual budgets and operational plans.

Agus Haryanto, a ministry spokesman, said that the new guideline is essential if state-owned companies are to carry out their commercial activities efficiently.

State-owned companies carrying out a special task for the government should elaborate on their assigned missions, targets and budgets, he said.

"A new government assignment should first be discussed with the Minister of Finance before being included in the working and budget plans," he said.

The annual working and budget plans should also contain financial projections, including operational revenues and profits.

The new guideline ruling was issued to curb the growing criticism of the poorly managed state-owned companies.

The state-owned companies are, by law, owned by the Ministry of Finance and overseen by related ministries. However, their activities are usually dictated by the ministries related to their industries.

Agus stressed that the daily activities strictly follow working and budget plans.

"Stated-owned firms cannot in any way carry out activities which are not included in their annual plans," he said, adding that a new business plan also needs the approval of shareholders.

The working and budget plans should be submitted to shareholders within 60 days before the opening of their fiscal year and be approved during the annual shareholders meeting.

Agus said that the working and budget plans of state-owned companies, which are listed on stock exchanges, are generally processed according to their own business statutes.(hen)