Danantara Asset Management Under GR 34/2025

On August 5th, 2025 the Government of Republic of Indonesia (“GOI”) has issued Government Regulation No. 34 of 2025 concerning Procedures for the Management of the Assets of BPI Danantara (“GR 34/2025”), establishing an adequate legal guidelines governing how BPI Danantara (“Agency or Danantara”) carries out management and development of Agency’s Assets.

GR 34/2025 regulates Danantara’s Asset categories and utilization, investments, loans, collateral and guarantees, assessments, book write-offs and invoice write-offs, as well as the use of the results of Agency Assets management.

Danantara’s Asset Categories and Utilization

Danantara or Agency’s Assets is defined as any form of goods or wealth owned by the Danantara (Agency) that can be valued in monetary terms and has exchange value and/or economic value (Artice 1(7) of GR 34/2025). Danantara’s Assets belong to and is under responsibility of Danantara, where Danantara is responsible for the management of Danantara’s Assets in line with principles of good governance, accountability and transparency (Article 2(3) of GR 34/2025). Danantara’s Assets come from capital participation, result of asset development, transfers of state or State-Owned Entities(BUMN) assets, grants and/or other legitimate sources of assets (Article 3 GR 34/2025).

Article 4 GR 34/2025 categories Agency Assets into: shares, securities, cash or cash equivalents, receivables, land and/or buildings, goods or other wealth. These Agency Assets may be used for: reserves that are used to cover or bear risks associated with investments and/or capital accumulation, agency operational expenditures that are used to carry out short-term activities and meet investment costs, Investments, deposits to the state; and/or other uses (Article 5 GR 34/2025).

It is also emphasized in Article 36 GR 34/2025 that the profits or losses experienced by the Danantara in carrying out the Asset management belongs to the Agency. In terms of the Danantara experiences a profit, then the profit portion may be designated as State revenue and subsequently deposited into the state treasury after reserves have been determined in order to cover investment risks and/or capital accumulation.

Any profits obtained by Danantara shall be utilized for: (i) mandatory reserves (cadangan wajib) until it reaches 20% (twenty percent) of capital; (ii) retained earnings (laba ditahan) sourced from allocated mandatory reserves (Article 37(1-4) GR 34/2025). Subsequently, the President may determine the distribution of profits for deposits to the State under Presidential Decree (Article 37 (5 and 6) GR 34/2025).

Article 6 (1 and 2) of GR 34/2025 stipulates that to increase the value of Agency Assets, Danantara is permitted to conduct cooperation with third parties including Investment Holdings and Investment Operations. The selection of the third parties shall be undertaken through tender process, limited selections and/or direct appointments. The cooperation shall be carried through power of attorney to manage and/or other forms of cooperation, which shall consist of: lease, Assets Utilization, fund or investment management; and/or other cooperations form (Article 6 (3 to 5) of GR 34/2025).

It is important to note that any form of cooperation with other than Investment Holding and Operation Holding shall consider the reputation, financial capability, and/or expertise level of the potential cooperation partners (Article 6(6) GR 34/2025). Danantara may transfer assets through sale and purchase or other legitimate methods of assets transfer (Article 7 GR 34/2025).

Danantara Investment

Danantara may make direct or indirect investments including cooperation with Investment Holding, Operation Holding and third parties (Article 8 of GR 34/2025). The investment shall be made in the form of capital participation (ownership of 99% shares in Investment Holding and Operation Holding), commercial papers (issued by GOI, Bank of Indonesia and State-Owned Entity having Investment Grade), cash or cash equivalents, receivables (loan to Investment Holding and Operation Holding), and/or land and/or buildings (Articles 9 to 14 of GR 34/2025).

For the investment purposes, Danantara shall prepare investment plan as part of the annual work plan and budget of Danantara to be presented to the Supervisory Board and approved by the President (Article 15 of GR 34/2025). Danantara shall undertake periodic evaluations of investment implementation, investment asset performance, investment needs, and/or operational requirements in the coming year as the basis for evaluation of future investment (Article 17(1 and 2) of GR 34/2025).

As a result of the investment evaluation, Danantara may decide to carry out cut loss and total loss actions (Article 17(3) of GR 34/2025), where Danantara can not be held legally responsible for losses resulting from the cut loss and total loss, if Danantara can prove the following:

a. the loss was not due his fault or negligence;
b. the decision has been taken in good faith and with caution based on adequate study;
c. there’s no conflict or interest;
d. not to obtain personal gain illegally; and/or
e. cut loss and total loss decision was intended to prevent greater losses.

Article 17(4) of GR 34/2025 does not give further explanation on whether the responsility shall also be addressed to Danantara executives if any of the conditions under Article 17(4) of GR 34/2025 are met.

Loan and Asset Guarantee

Danantara may give loan for operational and other needs to and request asset collateral from Investment Holding or Operation Holding and execute loan agreement (Article 22 and 23 of GR 34/2025). The said loan must be approved by the President. Danantara is also authorized to pledge Agency Assets with the approval of the President, save for Agency Assets in the form of equity in Investment Holding or Operation Holding that cannot be used as collateral (Article 26 of GR 34/2025). Besides, Danantara may provide guarantees to Investment Holding based on the request of Investment Holding.

Agency Assets – Book Write Off and Invoice Write Off

Danantara may carry out book write off (penghapusbukuan) for Agency Assets managemet purposes, due to transfer and/or certain conditions (Article 33 of GR 34/2025). The eligible Agency Assets for book write off, consist of the following:

a. Bad debts that have been optimally collected and restructured remain uncollectible and are not caused by any failure or negligence;
b. investments that no longer have value and/or have no prospects for recovery; and/or
c. Agency Assets that have exceeded their economic life spans, can not be utilized, and/or there are other more suitable alternative uses.

The book write off does not does not remove Danantara’s authority to collect nonperforming receivables that has already been written off. However, Danantara may undertake the invoice write-off (penghapustagihan) of Danantara’s Assets that have been written off by proposing the write-off of the invoices as part of the approval of Danantara's annual work and budget plan. The proposal of the write-off of the invoices must be submitted to the Supervisory Board and approved by the President.

GR 34/2025 is effective as of the date of promulgation 5 August 2025.

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