Twenty-percent share ownership

Twenty-percent share ownership

Minister of Cooperatives and Small Enterprises Subiakto
Tjakrawerdaya has quoted President Soeharto's appeal to limit the
purchase of shares of companies which have gone public to 15
percent, in order to prevent someone or a certain group from
becoming a majority shareholder.

However, PT Nusamba, led by Bob Hasan and whose shares are
predominantly owned by the Super Semar Foundation, now owns about
22.5 percent of PT Astra International shares. This is not in
violation of the prevailing capital market regulations, i.e. the
Capital Market Law, which state that the purchase of a company's
shares equaling or exceeding 20 percent is allowed, provided it
is done in a transparent way: that it is registered officially at
the stock exchange. This method is called the "tender over". What
is prohibited is the covert purchase of shares, or what is
referred to as "insider trading", which may cause losses to
public shareholders.

The law is also clear on the matter regarding the authority of
the Capital Market Supervisory Agency, which sends a warning if
there is a share purchase which is viewed as insider trading.

The Indonesian capital market has existed for eight years. The
stock exchange still needs to win the community's confidence.
There should not be an impression that capital market regulations
can be changed arbitrarily, according to the wishes of state
officials.

It would be a good thing if the finance minister, in his
capacity as the authorized and responsible state official on the
running of the capital market in Indonesia, clarified the matter.
He should not keep mum. He should not take an attitude of
"silence is golden".

Of late, there has been a tendency on the part of the
government to ignore the laws in the financial field. One example
is Presidential Instruction No. 6 of 1996, which gives tax
exemption to PT Timor Putra Nasional. The tax laws in force
clearly do not recognize the granting of tax exemption
facilities, both subjective and objective. The granting of tax
facilities to PT Timor Putra Nasional only is discriminatory. In
implementing tax laws as public law, discriminatory steps are
prohibited. Although the granting of the facility is formulated
as tax debt borne by the state, it means that the government has
given tax subsidies to PT Timor Putra Nasional. Tax subsidies
have to be mentioned and accounted for in the State Budget and
approval for them obtained from the House of Representatives (see
Article 23 of the 1945 Constitution). The finance minister needs
to explain the matter. The House should also give attention to
it, particularly the commissions for state budget and finance.
The Supreme Audit Agency should also have a say in it. Another
matter is the issuance of a Presidential Decision which grants
income tax exemption to PT PAL (a state-owned company) in
Surabaya.

If the government has provided examples of discriminatory
steps in implementing the tax laws, perhaps it may lead to the
unwillingness of many taxpayers to adhere to the prevailing tax
laws.

SUHARSONO HADIKUSUMO

Jakarta