New Framework for BUMN Management: Separation of the Functions of BP BUMN and BPI Danantara and the Cut-Loss Mechanism for Directors

The Government has issued Regulation No. 38 of 2026 (“Regulation 38/2026”) on Management of State-Owned Enterprises (Badan Usaha Milik Negara – “BUMN”). Upon entering into force, Regulation 38/2026 simultaneously repealed and replaced the following legal framework:[1]

1. Article 29 – Article 43 Regulation of the Government No.43 of 2005 on the Merger, Consolidation, Acquisition and Changing of the Legal Entity Form of BUMN; and
2. Regulation of the Government No. 45 of 2005 on the Establishment, Management, Supervision, and Dissolution of BUMN, as amended by Regulation of the Government No.23 of 2022 (collectively referred to as “Regulation 45/2005”).