Most telling is a clampdown on the country’s nominee director system, via a document released by President Susilo Bambang Yudhoyonoto. Networks have circumvented a mandate for locals to be involved in agency management by hiring a nominee as the local face of the company, while foreign bosses have run the business using titles such as technical director.
“Networks will now have to have local directors who are actively in charge,” said a source.
Commercials production companies remain strictly off limits, while business and management consultation services — which include the strategic part of the agency model — can now only be 49 per cent-owned by foreign players. Another source said: “The concern is that investors will think twice about putting their money into Indonesia.”
It remains unclear how the regulations will be enforced. No company has been punished to date.
