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)