Government Regulation Number 19 of 2026 Expands Danantara's Authority and Control over State Investment

Introduction

On April 8, 2026, the Government issued Government Regulation Number 19 of 2026 on the Amendment to Government Regulation Number 10 of 2025 on the Organization and Governance of the Daya Anagata Nusantara Investment Management Agency (“GR 19/2026”). GR 19/2026 adjusts the regulations regarding the authority, governance, and execution of duties of the Daya Anagata Nusantara ("Danantara") Investment Management Agency to align with changes in the regulation of State-Owned Enterprises (“SOEs”) (Badan Usaha Milik Negara, “BUMN”) management and state investment.

The issuance of GR 19/2026 follows up on the enactment of Law Number 16 of 2025 on the Fourth Amendment to Law Number 19 of 2003 on State-Owned Enterprises. The Law updates the regulations concerning the management of state investment and the restructuring of SOEs, including the establishment of the State-Owned Enterprise Regulatory Agency (Badan Pengaturan Badan Usaha Milik Negara, “BP BUMN”) as an institution that executes government duties in the field of SOE regulation. In line with these changes, GR 19/2026 adjusts several institutional, authority, and governance aspects of Danantara.

Comparison

GR 19/2026 amends, adds, and inserts several provisions previously regulated under Government Regulation Number 10 of 2025 on the Organization and Governance of the Daya Anagata Nusantara Investment Management Agency (“GR 10/2025”). The following is a comparison between GR 19/2026 and GR 10/2025:

Key Provisions

Updates to Institutional and Holding Definitions 

Article 1 amends several definitions related to Danantara's institutional setup and SOE management. GR 19/2026 regulates BP BUMN as a government institution that executes duties in the field of SOE regulation. Additionally, Article 1 regulates an Investment Holding as a manager of dividends and asset empowerment, and an Operational Holding as the party supervising the operational activities of SOEs.

Expansion of Danantara's Authority and Policies 

Article 4 grants independence to the Danantara Investment Management Agency by removing the requirement for the Minister's involvement or approval in establishing Holdings and approving proposals for the asset write-off and receivable write-off of SOE Assets. A new authority is set forth in Article 4 paragraph (2) letter h, whereby Danantara is now authorized to determine guidelines or strategic policies across 9 (nine) fields, comprising:

1. Accounting and finance;

2. Development and investment;

3. Operations and procurement of goods and/or services;

4. Information technology;

5. Human resources;

6. Risk management and internal oversight;

7. Law and compliance;

8. Social and environmental responsibility programs; and

9. Environmental, social, and governance (ESG) programs.

Furthermore, Article 4 paragraph (3) also stipulates that Danantara may propose candidates for the board of directors and board of commissioners of SOEs to BP BUMN, as well as appoint and dismiss the leadership of the Investment Holding and Operational Holding.

Changes to the Composition of the Supervisory Board 

The composition of the Supervisory Board membership undergoes changes through Article 6. The Supervisory Board now consists of representatives from the ministries conducting government affairs in the fields of the economy, finance, and investment, as well as a representative from BP BUMN as stipulated in Article 6 paragraph (1) letter c.

Addition of the Supervisory Board's Approval Authority 

The Supervisory Board obtains additional authority through Article 7 paragraph (3). In addition to approving the amount of the annual statutory reserve, the Supervisory Board also approves the work plan before it is submitted to the Head of BP BUMN. The Supervisory Board also grants approval for actions of the Executive Agency (Badan Pelaksana) taken outside the annual work plan and budget.

Supervisory Board's Decision-Making Mechanism 

Article 10 stipulates that the Supervisory Board may adopt decisions through meetings or outside of meetings. In addition to physical meetings, decisions of the Supervisory Board may also be adopted through a circular resolution mechanism in the form of written approval circulated to all members.

Deadline for the Work Plan and Budget 

Chapter IVA adds provisions concerning the preparation and submission of the RKA. The Executive Agency is required to prepare the annual RKA and submit it to the Supervisory Board by no later than October 31, as stipulated in Article 21A. If the Supervisory Board has not granted approval by December 31, the RKA of the preceding year applies to the following year. Furthermore, Article 21A paragraphs (7) and (8) limit RKA amendments to a maximum of 1 (one) time within 1 (one) year, with a submission deadline of no later than July 31. The regulations regarding this timeframe also apply mutatis mutandis to the submission of the Agency's work plan to the Head of BP BUMN, as stipulated in Article 21B.

Employment Status and Prohibition of Family Relationships 

Article 22 regulates the employment status at the Danantara Investment Management Agency. There is a significant change regarding employment relationships, whereby the appointment, dismissal, position, as well as the rights and obligations of Danantara employees are now determined individually based on an Employment Agreement, whereas under the previous regulation they were determined based on a Collective Labor Agreement. Furthermore, Article 22 paragraph (4) prohibits Danantara employees from having family relationships up to the second degree or relationships through marriage with:

1. Members of the Supervisory Board;

2. Members of the Executive Agency;

3. Other Agency employees;

4. The Board of Directors of the Investment Holding or Operational Holding; or

5. The Board of Commissioners of the Investment Holding or Operational Holding.

Establishment of the Investment Holding and Operational Holding 

Chapter VIIIA adds provisions concerning the establishment of Investment Holdings and Operational Holdings. The Danantara Investment Management Agency is required to establish an Investment Holding and an Operational Holding in the form of a limited liability company with all shares owned by Danantara, as set forth in Article 29A. An Investment Holding may be established for investment purposes with a financial return orientation, to support national development and public services, or for other purposes approved by the President, as stipulated in Article 29B. For an Investment Holding focusing on national development and public services, its capital originates from Danantara's assets. In addition, the activities of such an Investment Holding must consider long-term benefits for national development, and be implemented by fulfilling the principles of accountability, sustainability, and good corporate governance, as stipulated in Article 29C. GR 19/2026 also provides explicit legal protection (ring-fencing), whereby Danantara is not liable for any consequences of legal actions taken by the Investment Holding and is not liable for losses of the Investment Holding exceeding the value of its equity participation, as stipulated in Article 29B paragraph (7).

State Equity Participation and Status as Fiscal Tool SOEs 

An Investment Holding established to support national development may receive State Equity Participation from the State Revenue and Expenditure Budget (Anggaran Pendapatan dan Belanja Negara, “APBN”), as stipulated in Article 31A paragraph (1). Such PMN may originate from cash, state-owned goods, state receivables from state enterprises or limited liability companies, or other state assets. Furthermore, Article 31A paragraph (3) stipulates that an Investment Holding receiving PMN holds the status of an SOE functioning as a state fiscal tool.

Appointment of PT Danantara Investment Management 

An Investment Holding established for investment purposes with a financial return orientation is managed by PT Danantara Investment Management, as stipulated in Article 32B. This provision applies to an Investment Holding formed pursuant to Article 29B paragraph (2) letter a.

Transitional Provisions

The obligation to submit the annual work plan and budget from the Executive Agency to the Supervisory Board, including submission by no later than October 31, takes effect starting from the preparation of the work plan for the 2028 financial year, as stipulated in Article 32A. Before such provision takes effect, the preparation and submission of the work plan shall continue to be carried out by taking into account best practices, good governance, and the provisions of laws and regulations.

Closing

GR 19/2026 adjusts the institutional setup, authority, and governance of the Danantara Investment Management Agency in line with changes in the regulation of SOEs and state investment, including the establishment of BP BUMN as an institution executing government duties in the field of SOE regulation. These adjustments encompass regulations concerning BP BUMN, Investment Holdings, and Operational Holdings; Danantara's independence in establishing Holdings and approving proposals for the asset write-off and receivable write-off of SOE Assets without the Minister's approval; the additional authority to determine guidelines or strategic policies across various fields; and proposing candidates for the board of directors and board of commissioners of SOEs to BP BUMN. GR 19/2026 also amends the composition of the Supervisory Board membership by adding a representative from BP BUMN and granting additional authority to the Supervisory Board to approve the annual statutory reserve, work plan, and actions of the Executive Agency outside the annual work plan and budget, which may be decided through meetings or circular resolution mechanisms. Furthermore, GR 19/2026 regulates the employment status of Danantara employees as workers based on employment agreements and prohibits family relationships up to the second degree or relationships through marriage with certain parties within Danantara and the Holdings. From a governance perspective, the Executive Agency is required to submit the Work Plan and Budget to the Supervisory Board by no later than October 31, with RKA amendments limited to a maximum of 1 (one) time within 1 (one) year and a submission deadline of no later than July 31, whereas such provision only takes effect for the preparation of the work plan for the 2028 financial year. GR 19/2026 also mandates the establishment of an Investment Holding and an Operational Holding with all shares owned by Danantara; regulates the establishment purposes and capital sources of certain Investment Holdings; regulates the granting of State Equity Participation to an Investment Holding that supports national development so that it holds the status of a state fiscal tool SOE; and designates PT Danantara Investment Management as the manager of the Investment Holding established for investment purposes with a financial return orientation.