Legislator says new bill contrary to 1945 Constitution
Legislator says new bill contrary to 1945 Constitution
JAKARTA (JP): A legislator is charging that a bill on limited
companies, to be reviewed soon by the House of Representatives,
does little to address the ascendancy of laissez faire capitalism
in Indonesia, which has spurred the growth of conglomerates and
monopolies.
Representative Aberson Marle Sihaloho told The Jakarta Post
yesterday that the bill also contradicts the 1945 Constitution,
which stipulates that society must be constructed to protect the
welfare of all.
"Even the Commercial Code of 1938 which will be replaced by
the new legislation ... stipulates some articles to protect
minority shareholders," Sihaloho said, referring to the 1938
Dutch legislation.
He stressed the importance of limiting the votes of powerful
private shareholders in listed companies.
The bill, on limited-liability companies (Perseroan Terbatas)
which contains 128 articles, was finally submitted to the House
last month after 20 years of revisions.
The Ministry of Justice initially proposed the bill in 1974 to
the State Secretariat, but changes in the business world required
revisions.
According to Sihaloho, a representative from the Indonesian
Democratic Party, the bill should adhere to Article 33 of the
1945 Constitution which stipulates that the economy be managed
for the public interest.
Family system
The first paragraph of Article 33 states: "The economy shall
be organized as a common endeavor based upon the principle of the
family system."
"One-share-one-vote is the basic principle of capitalism,"
Sihaloho said, as if to remind the public that the independence
of Indonesia was pursued to fight against capitalism.
Meanwhile, Soedargo Gautama, a lawyer who helped write the
bill, said that the long delay in the completion of the bill was
caused by the demand from foreign investors for the
one-share-one-vote principle.
Soedargo was quoted by Tempo weekly as saying, "We could
understand the demand, as major shareholders they surely do not
want to be treated equitably with the minority ones."
Another noted lawyer, Komar Kantaatmadja, however, sees
remarkable progress in the bill in that it stipulates the
protection of minority shareholders.
The bill, for example, rules that decisions on mergers,
acquisitions and liquidation shall be taken at a meeting which is
attended by at least 75 percent of the shareholders and shall be
adopted by at least 75 percent of the quorum.
Closed firm
Sihaloho also noted that the bill allows for large firms to
obtain a monopoly in a strategic industry even though they are
privately-owned, usually by members of one family.
He called this a "closed company" to differentiate it from a
listed company or public firm.
"It's unfair. It means that the bill tolerates the
accumulation of capital by a certain group just like in the
present situation," Sihaloho said.
He pointed to the privately-owned PT Bogasari Flour Mills as
an example. This firm has gained abundant benefit from its
monopoly in the production and distribution of wheat flour in
Indonesia since the 1970s, at the expense of society at large.
The legislator said that a large corporation such as Bogasari,
should be forced to go public because to redress the injustice
and redistribute at least some of the capital.
The majority shareholder of the Jakarta-based Bogasari is PT
Indocement Tunggal Perkasa, which is controlled by Indonesia's
number one tycoon, Liem Sioe Liong and Sudwikatmono, a
politically connected entertainment mogul.
Sihaloho said that the bill on limited companies should be
delivered to the House in a package with other bills on trusts,
small businesses, capital markets and balancing the money
allocated to the central government and provincial
administrations.(09/vin)