On Thursday (November 16), Dr. Paripurna Sugarda, a lecturer at the UGM Faculty of Law, was inaugurated as a professor of commercial law.
During the inauguration ceremony at the UGM Senate Hall, Professor Sugarda delivered a speech titled “Reassessing the Juridical Assumption that the Company’s Wealth is Part of the State’s Wealth or Finance and Its Treatment in the Future.”
According to the newly promoted professor, the performance of State-Owned Enterprises in the form of Limited Liability Companies (Persero) is currently suboptimal in conducting business activities due to legal and regulatory inconsistencies that do not support the application of management principles oriented towards the company’s goals.
These goals include increasing shareholder value through targeted profit achievement and other performance metrics.
“The main cause of this legal disharmony lies in the different perceptions of the company’s wealth, which comes from separated state wealth, which is considered juridically as part of the state’s wealth or finance,” he said.
He argued that these differing perceptions have resulted in State-Owned Enterprises (BUMN) being unable to perform their duties as mandated by Law Number 19 of 2003 concerning State-Owned Enterprises (SOE Law) optimally.
This is because private law jurisdiction becomes inseparable from public law jurisdiction, mainly administrative and criminal law, concerning the company’s assets and management.
“Claims against the wealth of the company as state finance or wealth not only hinder the optimal achievement of the company’s goals but also, from a legal perspective, especially business law, have disregarded legal principles, theories, and adages of law and business law, causing ambiguity in the management of the company, whether to adhere to civil law and business law within the realm of private law or adhere to criminal law principles and administrative law within the realm of public law,” he said.
The existence of these two legal realms puts directors and commissioners in a difficult position. Business opportunities considered very strategic for optimizing profits may have to be passed up if there is a risk of harming the company, which could fall into the realm of corruption crime.
According to him, it is necessary to revise the SOE Law to explicitly state that the company’s wealth belongs to the company itself.
With the application of the lex spesialis derogat legi generali principle and the lex posteriori derogat legi priori principle, claims that the company’s wealth is state finance or wealth can be set aside.
“At the same time, it is necessary to review the juridical assumption that the company’s wealth is part of the state’s finance or wealth,” he explained.
Furthermore, the professionalism and integrity of company managers are also required. Company managers are demanded to have independence in every business decision-making process in company management, free from the opportunity to engage in moral hazard and violations of Good Corporate Governance principles.
However, what is no less critical, he added, is that BUMN directors also comply with criminal rules in the form of bribery, embezzlement, theft, fraud, forgery, and sectoral laws that carry criminal threats, such as banking law.
“These rules will still apply to anyone who violates them, whether in the company environment or the private sector,” he concluded.
Several officials attended the professor’s inauguration ceremony, including the Chair of the Kagama Central Board, Ganjar Pranowo, and the President Director of Jasa Raharja, Rivan A. Purwantono.
Author: Gusti Grehenson