Transformation of PD AIJ into a private limited company
The Provincial Government of North Sumatra (Pemprov) is promoting the legal transformation of the regional company (PD) Aneka Industri dan Jasa (AIJ) into a regional private limited company (Perseroda).
This transformation is considered crucial for strengthening corporate governance, promoting business development, and opening access to the legal system and electronic public procurement (E-Catalog).
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This was communicated by Vice-Governor Surya of North Sumatra during the reading of the Governor’s explanatory notes on the draft regional regulation (Ranperda) concerning the regional private limited company AIJ, at a plenary session of the Regional People’s Council of North Sumatra (DPRD) in the DPRD plenary meeting hall at Jalan Imam Bonjol, Medan.
The plenary session was chaired by the Vice-Chairman of the DPRD of North Sumatra, Soetarto, and attended by the Acting Secretary of the Provincial Government of North Sumatra, Sulaiman Harahap, members of the DPRD of North Sumatra, and various heads of regional government agencies (OPDs) within the Provincial Government of North Sumatra.
In his explanatory notes, Surya stated that PD AIJ was established pursuant to Regional Ordinance No. 26 of 1985 through the merger of eight regional companies: PD Sumber Daya, PD Pabrik Batu Bata Teladan, PD Obor, PD Percetakan, PD Industri Es Parwita Yasa, PD Hiburan, PD Toko Buku & Nak, and PD Perisai. As a regional enterprise (BUMD) owned by the Provincial Government of North Sumatra, PD AIJ is expected to make a greater contribution to regional own revenues (PAD). According to Surya, this requires a paradigm shift in business management.
“To change the current paradigm in our bureaucracy, PD Aneka Industri dan Jasa of the Province of North Sumatra must be capable of a significant expansion in terms of personnel, management, and other technical aspects, aimed at future business plans,” said Surya.
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He explained that the change of legal form is also prescribed by Section 331 (3) and Section 402 (2) of Regional Administration Act No. 23 of 2014, which requires regional enterprises (BUMD) to change their legal form and become regional public companies (Perumda) or regional private companies (Perseroda).
In addition to being a legal obligation, the change of legal form of PD AIJ is also an urgent necessity. This follows a letter from the Director of Business Entities, Directorate General of Legal Affairs (AHU), Ministry of Justice and Human Rights of the Republic of Indonesia, dated October 24, 2025, no. AHU.7-AH.01-3643, in which PD AIJ’s application for registration in the AHU Online system was rejected. The rejection was based on the fact that the legal form “Regional Company” had been revoked under Act No. 5 of 1962 and was no longer valid.
As a result, PD AIJ experienced difficulties in obtaining legal personality under a modern legal system and was unable to gain access to the government’s electronic procurement system (E-Catalog). On the same occasion, the Bureau for Regional Regulation (Bapemperda) of the Regional People’s Representatives of North Sumatra (DPRD), through its spokesperson Yahdi Khoir Harahap, reported on the results of the discussions regarding the draft regional regulation proposed by the Provincial Government of North Sumatra.
According to Yahdi, the harmonisation process was carried out to ensure that the content of the draft regional ordinance aligns with higher legislation and regulations, including Act No. 23 of 2014 on Regional Administration, Act No. 40 of 2007 on Limited Liability Companies, and Government Regulation No. 54 of 2017 on Regional Enterprises.
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From a sociological perspective, Yahdi continued, regional enterprises (BUMD) in North Sumatra still face various challenges that hinder them from meeting community expectations regarding the regional economy or from optimally increasing their contribution to local revenue (PAD).
“The conversion to a limited liability company is an important step for companies to implement more professional and efficient management. We hope that these laws and regulations will be accepted by the community and will have strong sociological validity,” said Yahdi. ***rel
