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Asia Times
10 hours ago
- Business
- Asia Times
The hard road to a clean and profitable Danantara
The recent inauguration of Danantara, Indonesia's new sovereign wealth fund, marks a remarkable development in the Southeast Asian nation's economic strategy. Established through amendment to the State-Owned Enterprises Law (Law No. 1), Danantara's creation has sparked significant discussion, often drawing comparisons with regional giants such as Singapore's Temasek Holdings and Malaysia's Khazanah Nasional. Yet, a critical aspect often overlooked is the profound disparity in legal frameworks that govern these entities and the implications for Indonesian state-owned enterprises (SOEs). Indonesia's legal framework for managing SOEs has traditionally been rigid and risk-averse. Under the former SOE Law, boards of directors were perpetually at dual risks: navigating business losses and evading potential corruption charges. This ambiguity often stemmed from the blurred legal lines that failed to distinguish between genuine business losses and misappropriation of public funds. Consequently, SOEs were involved in a stringent compliance framework that stifled innovation, promoted bureaucratic conservatism and hindered the development of a dynamic and competitive economy. The reformed SOE Law attempts to mitigate these challenges by reclassifying business losses as corporate losses instead of losses to state finances, significantly reducing the criminal liability under Indonesia's principal anti-corruption law (UU Tipikor). However, a more detailed review of UU Tipikor—particularly Articles 2 and 3—suggests that corruption may still be conducted based on two criteria: losses to state finances ( keuangan negara ) and harm to the state economy ( perekonomian negara ). While the new SOE Law narrows the risk associated with state financial losses, the interpretation of 'harm to the state economy' remains nebulous and broad. Unlike financial losses, which are measurable and direct, harm to the state economy is a much broader notion. It could be interpreted to include impacts on the country's investment climate, economic system stability or other material adverse effects. Governance and oversight weaknesses pose the most immediate risk to Danantara's mission. Unlike well-established funds such as Temasek or Khazanah, which are overseen by independent boards with rigorous checks, Danantara is ultimately controlled by the Executive Office of the President. Its enabling law (Law No. 1 of 2025) places the fund under the president, delegated via the SOE Ministry. This centralized control has raised alarms that Danantara could become a vehicle for political patronage rather than objective investment management. Worryingly, Indonesia's national audit body (BPK) currently lacks a clear mandate to scrutinize SOEs' books at this stage, removing a critical layer of independent oversight. The exclusion of the state audit agency from the fund's oversight framework means billions in public assets could be managed with limited external accountability, a structural flaw that undermines transparency and investor trust. If the foundation of this institution is built on insufficient checks, the door opens to mismanagement or worse. Closely intertwined is the risk of political interference. By design, Danantara's management answers to political authorities, which heightens the possibility of government directives influencing investment decisions. Past governance issues in Indonesian SOEs often stemmed from political interest superseding commercial logic, and Danantara's current setup may not fully solve this. Analysts note that the fund remains 'inherently tied to the government and political influence' under the present structure. That has manifested in market fears, despite presidential assurances of open audits ; there are persistent concerns that the fund could be misused for short-term political goals or the benefit of cronies . Such interference would erode not only Danantara's profitability but also its reputation. The first week of trading after Danantara's launch vividly illustrated this: mere speculation about heavy state control was enough to send Indonesian stocks tumbling and investors fleeing. Legal and structural uncertainties add another layer of risk. Danantara represents a radical reorganization of state assets, and not all roles and responsibilities have been clearly delineated. Tension could emerge between Danantara and existing institutions like the Finance Ministry or the SOE Ministry over who ultimately calls the shots on strategy and budgets. Some experts warn of a potential conflict of authority that could create bureaucratic bottlenecks and confusion in managing the fund's portfolio. Unless comprehensive legal alignment is achieved, Indonesia risks undermining the very goal of creating a more dynamic, innovative and business-friendly SOE sector. To secure Danantara's success and allay early concerns, Indonesia should swiftly implement a set of governance and integrity reforms. First, establish independent oversight by creating a truly independent supervisory board or council for Danantara composed of reputable professionals (including international experts and domestic technocrats) who are not beholden to the current administration. This body should have the authority to oversee the fund's strategy and audit its finances as well as provide checks and balances. Second, strengthen corporate governance and integrity to ensure Danantara and its portfolio SOEs adopt the highest standards of corporate governance, clear performance benchmarks, risk management frameworks, and zero-tolerance policies on corruption. The executives running the fund and the companies under it must be selected based on merit and insulated from political pressure. A code of conduct should bar political office-holders from interfering in day-to-day decisions. Over time, consider partial listings or independent trustees for some holdings to introduce market discipline. These steps will professionalize operations and guard against the fund becoming a 'vehicle for political patronage.' Finally, legally guarantee non-interference by enshrining in law the operational autonomy of Danantara's management. The government should explicitly limit its role to a shareholders-like function, setting broad objectives and risk appetite but not micromanaging investments. Fixed terms for the fund's CEO and directors, removable only for cause, could help shield them from political turnover. Clarify the legal framework to resolve any overlaps; for instance, formalize how the Finance Ministry supports the funds or handles any needed capital injections, to remove uncertainty. Clear, stable regulations will provide the legal certainty global investors need to partner with Danantara. We hope that the government will uphold public trust by strengthening oversight, depoliticizing management, tightening compliance and committing to transparency. If governed with integrity, Danantara can indeed be a powerful engine of growth and a legacy-building institution for Indonesia. But if mismanaged, it risks becoming a US$900 billion liability. We should remain optimistic yet vigilant, ensuring that the government actively mitigates all risks and takes necessary precautions. Ahmad Novindri Aji Sukma is a PhD researcher at the University of Cambridge, specializing in criminology. Arfian Setiaji is a senior legal officer and a University of Washington alumnus specializing in corporate and tech law.
Time of India
21-05-2025
- Business
- Time of India
CCI okays Temasek Holdings minority stake purchase in Haldiram Snacks Food
The Competition Commission of India on Tuesday approved Singapore's Temasek Holdings proposed acquisition of a minority stake in Haldiram Snacks Food . Temasek Holdings through its arm Jongsong Investments Pte is acquiring a stake in the target company. "The proposed transaction entails the acquisition of less than 10 per cent of the issued and paid-up equity share capital of the target ( Haldiram Snacks Food Pvt Ltd) by the acquirer (Jongsong Investments Pte)," the Competition Commission of India (CCI) said in a release. Haldiram Snacks Food is the combined business of the two fractions of the Haldiram family - Delhi and Nagpur. The National Company Law Tribunal has already approved the process of merger of the two fractions, while other regulatory approvals are awaited. "Commission approves the acquisition of certain issued and paid-up equity share capital of Haldiram Snacks Food Pvt Ltd (target) by Jongsong Investments Pte Ltd (acquirer)," it added. Established in 1937 as a retail sweets and namkeen shop in Bikaner, Rajasthan by Ganga Bhishen Agarwal, Haldiram products are now sold in over 80 countries. In 2022, it was announced that the packaged snacks businesses of Delhi-based Haldiram Snacks and Nagpur-based Haldiram Foods International would be first demerged and then merged into an entity named Haldiram Snacks Food. In a separate release, CCI on Tuesday approved the acquisition of majority stake/control over Nazara Technologies Ltd by Axana Estates LLP , Plutus Wealth Management LLP and Junomoneta Finsol Pvt Ltd. Axana is an LLP incorporated in India. Axana currently does not undertake any business activities or hold any investments and its proposed business involves real estate and business of dealing in shares and securities and other financial instruments. "Commission approves acquisition of majority stake/control over Nazara Technologies Ltd by Axana Estates LLP, Plutus Wealth Management LLP and Junomoneta Finsol Pvt Ltd," the competition watchdog said. Plutus is engaged in the business of stock and commodity broking, trading and investments in stock, commodities, and related businesses and Junomoneta Finsol is engaged in the business of proprietary stock broking and trades in equity, commodity and derivative markets. Nazara functions as a diversified platform in gaming and sports media. Additionally, it is active in the skill-based real money gaming segment and is also engaged in esports events and offers a multi-sports content platform catering to sports enthusiasts in India and the United States. Deals beyond a certain threshold require approval from the regulator, which keep a tab on unfair business practices as well as promotes fair competition in the marketplace.
Economic Times
20-05-2025
- Business
- Economic Times
CCI okays Temasek Holdings minority stake purchase in Haldiram Snacks Food
The Competition Commission of India on Tuesday approved Singapore's Temasek Holdings proposed acquisition of a minority stake in Haldiram Snacks Food. Temasek Holdings through its arm Jongsong Investments Pte is acquiring a stake in the target company. "The proposed transaction entails the acquisition of less than 10 per cent of the issued and paid-up equity share capital of the target (Haldiram Snacks Food Pvt Ltd) by the acquirer (Jongsong Investments Pte)," the Competition Commission of India (CCI) said in a release. Haldiram Snacks Food is the combined business of the two fractions of the Haldiram family - Delhi and Nagpur. The National Company Law Tribunal has already approved the process of merger of the two fractions, while other regulatory approvals are awaited. "Commission approves the acquisition of certain issued and paid-up equity share capital of Haldiram Snacks Food Pvt Ltd (target) by Jongsong Investments Pte Ltd (acquirer)," it added. Established in 1937 as a retail sweets and namkeen shop in Bikaner, Rajasthan by Ganga Bhishen Agarwal, Haldiram products are now sold in over 80 countries. In 2022, it was announced that the packaged snacks businesses of Delhi-based Haldiram Snacks and Nagpur-based Haldiram Foods International would be first demerged and then merged into an entity named Haldiram Snacks Food. In a separate release, CCI on Tuesday approved the acquisition of majority stake/control over Nazara Technologies Ltd by Axana Estates LLP, Plutus Wealth Management LLP and Junomoneta Finsol Pvt Ltd. Axana is an LLP incorporated in India. Axana currently does not undertake any business activities or hold any investments and its proposed business involves real estate and business of dealing in shares and securities and other financial instruments. "Commission approves acquisition of majority stake/control over Nazara Technologies Ltd by Axana Estates LLP, Plutus Wealth Management LLP and Junomoneta Finsol Pvt Ltd," the competition watchdog said. Plutus is engaged in the business of stock and commodity broking, trading and investments in stock, commodities, and related businesses and Junomoneta Finsol is engaged in the business of proprietary stock broking and trades in equity, commodity and derivative markets. Nazara functions as a diversified platform in gaming and sports media. Additionally, it is active in the skill-based real money gaming segment and is also engaged in esports events and offers a multi-sports content platform catering to sports enthusiasts in India and the United States. Deals beyond a certain threshold require approval from the regulator, which keep a tab on unfair business practices as well as promotes fair competition in the marketplace.
Time of India
20-05-2025
- Business
- Time of India
CCI okays Temasek Holdings minority stake purchase in Haldiram Snacks Food
The Competition Commission of India on Tuesday approved Singapore's Temasek Holdings proposed acquisition of a minority stake in Haldiram Snacks Food . Temasek Holdings through its arm Jongsong Investments Pte is acquiring a stake in the target company. "The proposed transaction entails the acquisition of less than 10 per cent of the issued and paid-up equity share capital of the target (Haldiram Snacks Food Pvt Ltd) by the acquirer (Jongsong Investments Pte)," the Competition Commission of India (CCI) said in a release. Haldiram Snacks Food is the combined business of the two fractions of the Haldiram family - Delhi and Nagpur. The National Company Law Tribunal has already approved the process of merger of the two fractions, while other regulatory approvals are awaited. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Click here for more information Undo "Commission approves the acquisition of certain issued and paid-up equity share capital of Haldiram Snacks Food Pvt Ltd (target) by Jongsong Investments Pte Ltd (acquirer)," it added. Established in 1937 as a retail sweets and namkeen shop in Bikaner, Rajasthan by Ganga Bhishen Agarwal, Haldiram products are now sold in over 80 countries. Live Events In 2022, it was announced that the packaged snacks businesses of Delhi-based Haldiram Snacks and Nagpur-based Haldiram Foods International would be first demerged and then merged into an entity named Haldiram Snacks Food. In a separate release, CCI on Tuesday approved the acquisition of majority stake/control over Nazara Technologies Ltd by Axana Estates LLP , Plutus Wealth Management LLP and Junomoneta Finsol Pvt Ltd. Axana is an LLP incorporated in India. Axana currently does not undertake any business activities or hold any investments and its proposed business involves real estate and business of dealing in shares and securities and other financial instruments. "Commission approves acquisition of majority stake/control over Nazara Technologies Ltd by Axana Estates LLP, Plutus Wealth Management LLP and Junomoneta Finsol Pvt Ltd," the competition watchdog said. Plutus is engaged in the business of stock and commodity broking, trading and investments in stock, commodities, and related businesses and Junomoneta Finsol is engaged in the business of proprietary stock broking and trades in equity, commodity and derivative markets. Nazara functions as a diversified platform in gaming and sports media. Additionally, it is active in the skill-based real money gaming segment and is also engaged in esports events and offers a multi-sports content platform catering to sports enthusiasts in India and the United States. Deals beyond a certain threshold require approval from the regulator, which keep a tab on unfair business practices as well as promotes fair competition in the marketplace.
The Star
20-05-2025
- Business
- The Star
Dubai's red-hot real estate attracts big name backers
Iconic view: The Sheikh Zayed Road is seen with Dubai's iconic skyline illuminated in the background. — AP DUBAI: Dubai's real estate market – where property values have surged 70% in the last four years – is starting to entice a slew of new Wall Street investors. Brookfield Corp is weighing plans to develop a mixed-use community in the Dubai Hills neighbourhood, which would be its first residential real estate bet in the region, according to sources. A property manager owned by Singapore's Temasek Holdings is also currently scouting for investments in the city, some of the sources said. They would be joining the likes of Goldman Sachs Group and Asia-based asset manager Hillhouse Investment, which have both recently ploughed millions into the emirate's real estate. They have all been drawn by the surge in activity taking place across Dubai. In the last 24 months, the city recorded eight office building sales – more than the previous 10 years combined. The same goes for hotel transactions, where 15 deals took place in the past 30 months, according to real estate consultancy Knight Frank. 'The past two years have been busier for us than the whole previous decade on the capital market side,' said Andrew Love, head of capital markets and commercial agency at Knight Frank. 'Demand is growing from overseas buyers who are coming in search of better returns and lower taxes.' It is a far cry from the years following the financial crisis, when the image of hundreds of luxury cars left abandoned at Dubai International Airport by expats who could not keep up with their debts was etched into the minds of institutional investors around the world. It had been a visceral reminder of the boom-and-bust nature of the real estate market in the city, where the population is still dominated by foreigners to this day. Dubai's turnaround started in the aftermath of the pandemic when the city reopened earlier than others, drawing scores of wealthy tourists and investors to its sunny shores. The government's introduction of more liberal visa policies poured more fuel on that rally. After Russia's invasion of Ukraine, many of the country's wealthy moved some of their cash to the city in an effort to shield their assets from sanctions and tighter capital controls at home. They were soon joined by loads of newly minted crypto millionaires and hedge fund managers who were lured to Dubai by the emirate's low tax regime and a time zone that allows workers to trade across Asian, European and US hours. Taken together, the moves have sparked an unprecedented surge in residential and commercial real estate values. In the first quarter of 2025, before US President Donald Trump's trade war weighed on investor sentiment and contributed to a plunge in oil prices, Dubai notched record sales of homes valued above US$10mil. Brookfield began furthering its foray into Dubai's real estate market in 2020. Back then, the asset manager – along with its partner Investment Corporation of Dubai (ICD) – opened ICD Brookfield Place, Dubai's largest office tower. The building quickly filled up and now commands the city's highest commercial rents; in 2024, Brookfield was able to offload a 49% stake in the tower in a deal valuing the property at US$1.5bil. Now, the Canadian firm is weighing plans to build residential towers alongside offices and retail space that it would make available to rent in Dubai Hills, an area known for its luxury villas. Then there is Mapletree Investments, a property manager owned by Singapore's sovereign wealth fund Temasek. The firm's hoping to deploy about US$2bil in the Gulf region after opening an office in Abu Dhabi in 2024, other sources said. Inside Blackstone, executives have also held preliminary discussions across the Middle East region about commercial real estate investments, the sources said. — Bloomberg
