Hambra Samal present as Deputy of Business Infrastructure of the Ministry of State-Owned Enterprises representing the Government in the judicial review of the Law on State-Owned Enterprises (BUMN) on Tuesday (10/4) in the Plenary Courtroom of Constitutional Court. Photo by Humas MK/Ganie.

Deputy of Business Infrastructure of the Ministry of State-Owned EnterprisesHambra Samal present representing the Government in the follow-up hearing of Article 2 paragraph (1) letters a and b and Article 4 paragraph (4) of Law No. 19/2003 on State-Owned Enterprises (BUMN Law), Tuesday (10/4) afternoon.

The Government denied the Petitioners\' argument that the formation of holding leads to decline in state assets. According to Hambra, the transfer of shares in state-owned assets through the establishment of holding will cause the value of state assets to not change [and] not decrease. "In fact, the establishment holding creates greater added values," he said.

Hambra also explained that the Government has dwiwarna (golden) shares in SOEs that have become subsidiaries. Share ownership by the Government serves to strengthen and protect the interests of the Government through full control of the SOEs that become subsidiaries, and to retain SOE roles of the SOEs.

"The obligations of SOE holding company are to have a majority of shares of more than 50% in the SOE subsidiaries and to keep treating ex-SOE subsidiaries the same way as it does SOEs that are still carrying out government duties," said Hambra.

Furthermore, the Petitioners\' concern regarding the establishment of the BUMN holding will be hampered by the provisions of the Accounting Standard Regulation 65 (PSAK 65) that requires consolidation, the Government is of the opinion that the concern is entirely mistaken.

"In fact, the newly established SOE holding company also has consolidated financial statements in accordance with PSAK 65, as per consolidated financial statements of PT. Inalum Year 2017," Hambra explained.

Accordingly, according to the Government, the arguments of the Petitioners stating "the absence of consolidation will reduce the value of state assets" are false and unproved.

Albertus Magnus Putut Prabantoro and partner as Petitioners of case No. 14/PUU-XVI/2018 argue that both articles impair their constitutional rights as citizens. They claimed that the articles were normatively abused and it led to the issuance Government Regulation No. 47 of 2017 on the Equity Participation of the State of the Republic of Indonesia in State-Owned Limited Liability Company. In the government regulation, also known as PP Holding BUMN Tambang, shares of three SOEs are transferred to PT Indonesia Asahan Aluminum Persero (Inalum).

The three SOEs are PT Aneka Tambang Tbk (Persero), PT Timah Tbk (Persero), and PT Bukit Asam Tbk (Persero). In addition, the Petitioners claimed the implementation of Article 4 paragraph (4) of the BUMN Law shows the effect of state equity participation in other SOEs, so the SOE becomes a subsidiary of the other SOEs. This provision has eliminated the SOE and can be categorized as a new privatization model due to the transformation of SOE into SOE subsidiary without the mechanism of the state budget and House approval. (Nano Tresna Arfana/LA/Yuniar Widiastuti)