Jakarta, CNBC Indonesia – J&T Express openly revealed their method of circumventing the law in Indonesia regarding restrictions on foreign investment. Legal experts in Indonesia question the regulator’s decision to grant a business license to J&T Express.
This information is visible in J&T’s prospectus. According to the company, they are at risk of violating regulations due to the negative investment list (DNI) which limits foreign ownership in the courier sector to 49%.
The company explained that it registered PT Global Jet Express (company name J&T Indonesia) as a domestic capital company (PMDN). The prospectus reveals that J&T does business with affiliated entities, Indonesian companies and subsidiaries in the country.
“We conduct our business through affiliated entities in Indonesia, parent companies in Indonesia and their subsidiaries. We have contracts with parent companies in Indonesia, shareholders in Indonesia, both corporations and individuals,” wrote J&T’s prospectus.
In this way, J&T Global has effective control over the Indonesian affiliate consolidated entity. Including getting economic benefits and having the option to buy all shares in an Indonesian company if permitted by local law.
For information, PT Global Jet Express, according to the records of the Directorate General of General Legal Administration (AHU) of the Ministry of Law and Human Rights, is a company with PMDN status. However, this is different from the prospectus, the company is wholly owned by Winner Star Holding Ltd. Winner Star was then owned by Onwing GLobal Limited.
J&T Global Express Limited is known to be the owner of the company. The controlling shareholder of J&T Global Express is the founder of Jet Lie Lie.
Frank Alexander Hutapea, partner of Hotman Paris & Partners, gave his views on this issue. The key is Article 33 of the Investment Law and Article 12 of the Postal Law, which prohibits business actors from making business agreements using other people’s names.
Frank asked the relevant ministry whether what had been done violated existing regulations. “Please ask the relevant ministry whether this violates the investment law and ask whether nominations through contractual arrangements are prohibited? Are these nominees?” explained to CNBC Indonesia.
Business permits in Indonesia are granted by the Investment Coordinating Board led by the Minister of Investment Bahlil Lahadalia. Meanwhile, the courier industry is regulated by the Ministry of Transportation led by the Minister of Transportation Budi Karya Sumadi.
Neither BKPM nor the Ministry of Transportation have responded to questions from CNBC Indonesia regarding J&T Express business permits .
Indonesia is known to be J&T’s first market. The company then expanded with a number of e-commerce companies, namely providing logistics services such as Alibaba Group’s Taobao, retailer Shein and ByteDance’s TikTok.
Even so, this half year it is known that US$4 billion or half of its revenue came from China.
[Gambas:Video CNBC]