Indonesian government clarifies SOE amnesty remarks as part of governance reform push

Minister clarifies amnesty remarks

Minister of State Secretary Prasetyo Hadi clarified on Saturday that President Prabowo Subianto's recent remarks about possible amnesty for state-owned enterprise executives were intended to emphasize the government's commitment to corporate governance reform, not to signal imminent pardons for past misconduct.

Speaking at the Presidential Palace Complex in Jakarta, Hadi responded to questions about the president's Friday speech, in which Prabowo raised the possibility of establishing an ad hoc court and granting amnesty to SOE executives over problems extending back three decades.

"What he conveyed yesterday was an expression of our determination to have an unlimited commitment to improving our SOEs. If the question is whether this will go as far as amnesty, the answer is no, not yet. It would be too early to say that we have reached the stage of discussing an amnesty process."

The minister emphasized that the government's priority remains identifying and correcting corporate practices deemed improper at state-owned companies. The discussion about amnesty has not progressed beyond the president's initial remarks.

Massive restructuring underway

The clarification comes amid Indonesia's most ambitious state-owned enterprise restructuring in decades. President Prabowo announced on August 14 that 290 SOEs had been closed, generating savings exceeding Rp50 trillion from reduced expenses including director and commissioner salaries, building rentals, and official travel.

The government aims to reduce the total number of SOEs from 1,074 to a maximum of 300 by the end of 2026, meaning more than 750 state-owned companies will be closed under the consolidation program. As of April 2026, Indonesia had already liquidated 167 SOEs, primarily subsidiaries and sub-subsidiaries.

In his address to the Annual Session of the People's Consultative Assembly and Joint Session of the House of Representatives and Regional Representatives Council on Friday, Prabowo highlighted governance problems stemming from the previously bloated SOE sector. He criticized executives who managed companies without sufficient accountability to the state, noting that some had reported profits in financial statements later found to have been manipulated.

Danantara consolidation model

The restructuring centers on Danantara, Indonesia's state asset management agency established in February 2025 under Law No. 1 of 2025. Modeled after Singapore's Temasek Holdings, Danantara acts as a super holding company consolidating state-owned enterprise assets under unified management.

Hadi pointed to early results from the consolidation effort.

"Now that they are all under the management of Danantara, we are recording quite impressive profits, almost 300 percent to 400 percent."

Recent consolidation moves include the merger of seven state-owned logistics companies into PT Multi Terminal Indonesia in June 2026, and Danantara's acquisition of controlling stakes in four state-owned asset management companies in April 2026 for approximately Rp2.7 trillion.

The restructuring also involved dissolving the Ministry of State-Owned Enterprises in October 2025, replacing it with the State-Owned Enterprises Regulatory Agency under Law No. 16 of 2025, with Dony Oskaria appointed as head.

"The spirit is about reforming SOEs. It has not reached the issue of amnesty."

Hadi emphasized, drawing a clear line between the president's governance reform objectives and any concrete plans for executive pardons.

Hadi, who was appointed Minister of State Secretary in October 2024 and also serves as Presidential Spokesperson since April 2025, has become a key government communication official clarifying policy positions under President Prabowo's administration.