BUMN Financial Reports Allegedly Polished, Says Deputy Minister

Jakarta –

Performance BUMN works back into the spotlight. There are allegations that the financial reports of several state-owned enterprises, namely PT Waskita Karya (Persero) Tbk and PT Wijaya Karya (Persero) Tbk, have been polished.

Deputy Minister of BUMN Kartika Wirjoatmodjo said that there are three big issues in BUMN Karya. He mentioned, first, from the market side where competition is very tight.

“Almost all of these work projects, almost all of them have very small margins, margins are only 2-3% and many projects have even lost money in EPC so they have been playing cashflow all this time,” said Tiko in a working meeting with Commission VI, Monday (5 /6/2023) ago.

Second, regarding financial governance. Tiko said that in several BUMN Karya, such as Waskita Karya and Wijaya Karya, the financial reporting did not match the real conditions.

“Because indeed in some works such as Waskita, like Wika, the financial reporting also does not match the real conditions. This means that it is reported as if it has been profitable for years, even though the cash flow has never actually been positive,” he explained.

“There is indeed an issue in our financial reporting that we are currently investigating, in fact, has the financial reporting been real so far, or maybe a restatement is needed,” he continued.

Tiko continued, if there was a criminal element in the financial statements, his party could prosecute the old management who reported the financial statements.

“If there is fraud from the financial reporting side, we can take firm action within the existing governance framework,” he said.

Third, managerial governance. He acknowledged that the fundamental weakness of state-owned enterprises is that they do not implement an Enterprise Resource Planning (ERP) system.

“So eventually subcontract papers can appear, a piece of paper used to withdraw bank funds. Even though the project doesn’t actually exist,” he said.

The state-owned company that Tiko alluded to also opened its voice. Wijaya Karya Corporate Secretary, Mahendra Vijaya said, WIKA always refers to the applicable laws and regulations in the preparation of financial reports.

“We can also add, in terms of preparing financial statements, the company always refers to the applicable laws and regulations and makes full efforts to comply with the accounting principles that apply in Indonesia,” he said in a written statement.

Mahendra added that the company is always audited by a public accounting firm as an independent auditor. His party is now submitting this matter to the Ministry of SOEs as WIKA’s series A shareholder.

“And every financial report of the company is audited by a Public Accounting Firm as an Independent Auditor,” he continued.

The same thing was conveyed by SVP Corporate Secretary Waskita Karya Ermy Puspa Yunita. He said Waskita’s management fully handed over this authority to the Ministry of BUMN as Waskita’s series A shareholder.

“WSKT management fully supports the steps taken by the Ministry of SOEs to improve WSKT conditions for the better,” he said.

He explained, in terms of issuing financial reports, Waskita as a public company always refers to the applicable laws and regulations and has followed the regulations of the capital market supervisor and the Financial Services Authority (OJK).

“Before issuing financial reports, the company has also carried out several stages and also an audit process by a public accountant registered with the OJK as an independent auditor to fulfill obligations according to OJK regulations,” he explained.

(acd/the)