J&T Indonesia Threatened To Close Because It Is Suspected Of Violating Investment Provisions In Indonesia, How Come?

JAKARTA - PT Global Jet Express (J&T Indonesia) is in danger of being closed because it is considered to have violated investment provisions in Indonesia, where ownership of foreign companies should be a maximum of 49 percent.

For information, J&T Indonesia is included in the Domestic Investment category (PMN). The shareholders of PT Global Jet Express are PT Cakrawala Lintas Benua and PT Sukses Indo Investama. Meanwhile, the two companies are controlled by Robin Lo and Effendy with 50 percent of their respective share ownership.

Quoting Tiktok Market.id, it is stated that J&T is considered to be facing the risk of violating regulations regarding the negative investment list (DNI). The applicable DNI regulations regarding the ownership of foreign entities over companies engaged in the courier sector are limited to 49 percent.

"The Indonesian government does not want the important businesses for Indonesia to be controlled by foreign parties, so a negative investment list or negative list is formed, one of which is the courier business where foreign parties cannot control more than 49 percent of the shares in this sector company," quoted the explanation from the Tiktok account video.

In the J&T Global Express action which carried out an initial public offering (IPO) on the Hong Kong Exchange, several polemics related to how J&T Global Express runs its business in Indonesia.

As for the prospectus, J&T Global Express stated that PT Global Jet Express (J&T Indonesia) is fully owned through the Winner Star Holdings Limited (HK). However, control over J&T Indonesia is carried out through a contractual agreement, so that Global JET Express is considered an affiliated entity that is consolidated by J&T Global Express.

In addition, in the prospectus of Group Management J&T, it is said that it does not own shares directly in consolidated affiliated entities.

This J&T Express Indonesia share ownership scheme raises allegations of violations of the practice of borrowing the name or nominee arrangement which is prohibited by Law (UU) No. 25/2007 concerning Investment.

In addition, Article 33 of the regulation states that domestic investors and foreign investors who invest in limited companies are prohibited from making agreements or statements confirming that share ownership in the company is limited to and on behalf of others.

However, Cross-Country and Successful Cakrawala Indo Investama are also reported to have signed a number of agreements that allow PT Cahaya Global Berjaya (CGB) to consolidate control and obtain full economic benefits for J&T Indonesia.

Where CGB is a company wholly owned by J&T Global Express through Winner Star Holding. The company provides technical support, business support, and consulting services in exchange for service costs from J&T Express Indonesia.

Through this contractual agreement, the J&T Group gets three benefits. First, it allows the J&T Group to carry out effective J&T Express Indonesia control. Furthermore, it receives substantially all economic benefits from J&T Express Indonesia. And has an exclusive option to buy all or part of ownership in J&T Express Indonesia if and as long as it is permitted by Indonesian law.

"The third way the profit can flow to J&T Global is that they make service agreements between PT CGB and J&T Indonesia. Their services include planning, Finance, Operation, planning human resources, marketing and others and fees that must be paid to PT CGB for a number of services., but if there is additional information, we will update it again," said Public Relations J&T Express Diego Prayoga to VOI, Monday 27 November.