Tanri addresses graft in state companies

Tanri addresses graft in state companies

JAKARTA (JP): State Minister for the Empowerment of State
Enterprises Tanri Abeng has issued a new ruling to limit
involvement of top officials of state-owned companies in projects
or business transactions related to the firms.

The new ruling stipulates that all top officials and their
families must report to the minister if they are directly
participating in a project or business transaction worth at least
Rp 500 million, or if they have at least a 10 percent stake in a
company involved in the project, said Sofyan Djalil, an official
of the ministry's communications division.

"The new ruling was signed by the minister early last week,
and has been circulated to all top officials of the state-owned
companies," he said yesterday.

He said the new ruling was intended to prevent a conflict of
interest, adding that those who participated in any project or
business transaction must report the deal within five days.

Reports would then be made public by the minister, Sofyan
added.

Those who failed to report would face an administrative
sanction or could even be brought to the court, he said.

State-owned companies have been the cash cow of corrupt
government officials and their families.

Then president Soeharto in the middle of March appointed Tanri
as the first state minister to oversee a total of 159 state
companies.

Previously, the state-owned companies were under the control
of related technical ministries.

The Ministry of Trade and Industry, for instance, controlled
36 companies, while the Ministry of Finance oversaw 30 companies.

Tanri's latest move followed earlier allegations of insider
trading in the share transaction of publicly listed state-owned
cementmaker PT Semen Gresik, which is one of the six state-owned
listed companies to be recently privatized by the government.

Several prominent officials of the state-owned securities
companies PT Bahana Securities and PT Danareksa Sekuritas, two of
the three financial advisors of the privatization deal, were
allegedly set to gain profits from inside information that a
foreign strategic investor would bid for Semen Gresik.

The case is currently being investigated by the Capital Market
Supervisory Agency (Bapepam).

The government plans to privatize 12 state-owned companies in
the 1998/1999 fiscal year ending in March, to raise about Rp 15
trillion (US$1 billion) to help finance the cash-strapped state
budget.

Tanri was lambasted last month following an MOU agreement with
the Netherlands-based Ispat International to become an
unsolicited strategic investor for state-owned steelmaker PT
Krakatau Steel. Many said the process was not transparent,
although Tanri denied this charge. He said the MOU was not a
final deal and that the process was part of a transparent
mechanism agreed upon with the International Monetary Fund and
the World Bank. (rei)