The Indonesian Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) recently issued a new regulation No.10/POJK.04/2017 (“OJK Regulation No. 10/2017”), which amends regulation No.32/POJK.04/2014 concerning Plan and Procedure to Conduct General Meetings of Shareholders (“GMS”) for Public Listed Companies. OJK Regulation No.10/2017 was promulgated on 14 March 2017.
The 3 Key Changes
1. New procedures introduced for changes of shares’ rights
Where there has been a change of shares’ rights of a listed company that has more than one classification of shares, the following procedures must be complied with:
2. Shareholders without voting rights can participate in the GMS if it affects their rights.
Shareholders who do not have any voting rights but whose rights may be affected are also entitled to attend the GMS and participate in the decision-making process.
3. New article added on the appointment and dismissal of a listed company’s external auditor
OJK Regulation No. 10/2017 adds a new article concerning the appointment and dismissal of a public listed company’s external auditor. The appointment and dismissal of a public listed company’s external auditor must be decided in the GMS by considering the proposal of the board of commissioners. If the decision cannot be made at the GMS, such decision can be delegated to the board of commissioners accompanied by an explanation of (a) the reason for the delegation and (b) the criteria of the external auditor.
In conclusion, the new additions in OJK Regulation No. 10/2017 provide increased protection of minority rights, particularly related to the mechanism for change of shares’ rights.
If you have any questions or require any additional information, please contact Poppy Cut Rahmasuci or Sianti Candra or the ZICO Law partner you usually deal with.
This alert is for general information only and is not a substitute for legal advice.