Holding company, absurd!

Holding company, absurd!

From Bisnis Indonesia

State Minister of the Empowerment of State Enterprises Tanri
Abeng has enthusiastically stated that he will set up a holding
company from the present 159 state companies. He further said
that with the establishment of this holding company, the value of
state enterprises will increase by a certain percentage. This is
absurd! How can a holding company enhance the value of the
enterprises?

Tanri plans to hire foreign consultants to study the
feasibility of establishing the holding company. My questions
are:

1. Does the minister have the authority to change a fundamental
case, if the benefit is still doubtful? If the minister carries
out his plan, it will become a burden or a time bomb for the next
government.

2. How many billions more rupiah of state funds will be
sacrificed just to pay the expensive consultants, who will only
produce formal justification?

3. Establishing a holding company will only create a financial
burden for its subsidiary companies. And as a result, these
companies are prone to suffer losses instead of making profits.

4. The plan to set up a holding company will only take us back to
the 1970s era, to the greatest advantage for the organization
only. In welcoming the third millennium, other enterprises tend
to trim down their operations. Why on earth does the minister
want to establish inefficient and complicated bureaucracy?

5. If supervision is the main concern, doesn't every state
company have its own supervisory boards such as a supervisory
council and an auditing division? And the government provides
such audit agencies as the Development Finance Comptroller and
the Supreme Audit Agency. So, do we really need more bodies of
the same kind?

M. TANJUNG

Jakarta