Prabowo criticises regulations hampering audit of state-owned enterprise subsidiaries

Jakarta — President Prabowo Subianto has criticised the existence of regulations that hamper auditing of subsidiary companies of state-owned enterprises (BUMN), whilst BUMN parent companies can be audited by the State Audit Board (BPK).

Before state officials and Danantara executives, President Prabowo also expressed surprise that one state-owned company possesses hundreds of subsidiary and sub-subsidiary companies.

“I am shocked that Pertamina has 200 subsidiary and sub-subsidiary companies, and what is even stranger is that there are even more peculiar regulations. If BUMN can be audited by the state, they say that BUMN subsidiaries cannot be audited. What regulation is this?” said President Prabowo when delivering remarks at the first-anniversary celebration of the Danantara Investment Management Agency at Wisma Danantara, Jakarta, on Wednesday.

For this reason, President Prabowo believes that BUMN consolidation through Danantara is the right decision to prevent irregularities and potential loss of state wealth.

“Our premise turned out to be correct. Consolidation under one management with rational standards and world-class benchmarks, I have achieved a return on assets above 300 per cent,” said Prabowo.

On the same occasion, President Prabowo shared his views on good corporate governance, which stems from a clean heart.

“I am convinced and believe that the key to good management lies in the heart and soul,” President Prabowo told his team, particularly those serving as Danantara executives.

The President also reminded that the achievements attained by Danantara over the past year are still insufficient.

“This is still far from our targets. A good company should have a return on assets of at least 10 per cent. If excellent, 12 per cent; if outstanding, 15 per cent. We must have a good target, namely 10 per cent. However, we understand that this may not be achievable in the early years,” said Prabowo.

The President continued that if Danantara’s return on assets is targeted at 5 per cent, then Danantara, according to the President, must deposit at least 50 billion US dollars per year to the state.

“50 billion dollars is — State Secretary, how much is that? Rp800 trillion. So, Danantara leadership, your target is still far away,” added President Prabowo.