April 14, 2021
After the passage of more than 15 years since its last major overhaul of capital-markets rules, the Indonesian Financial Services Authority (Otoritas Jasa Keuangan / “OJK”) has issued an important new instrument that updates the requirements and procedures that regulate the organization, governance, and activities of (i) capital-market institutions and support professions, and (ii) public companies. While much of the new regulation constitutes a codification of existing rules, it also arms the OJK with a number of significant new powers, and incorporates the OJK’s first-ever set of written rules on how public companies may voluntarily be taken private. The new regulation, OJK Regulation No. 3/POJK.04/2021 (“Reg. 3”),[1] was issued and entered into effect on 22 February 2021. In this ABNR Update, we focus on the issues of corporate privatization, shareholdings by investment managers, and controllers of public companies. But first an explanatory note on terminology – a public company in Indonesia is any company that has at least 300 shareholders and a minimum paid-up capital of IDR 3 billion (USD 206,000), or such other number of shareholders and/or quantum of paid-up capital as may be stipulated by the OJK. Meanwhile, a listed company is a public company whose shares are listed on the Indonesia Stock Exchange. Thus, not all public companies are listed companies, but all listed companies must be public companies. A. Procedures and Requirements for Corporate Privatization (Voluntary and Involuntary) The most notable feature of Reg. 3 in relation to public companies is its introduction of new rules governing how a company may voluntarily go private. This marks the first time in Indonesia that such written procedures...