Amid the COVID-19 pandemic, the Indonesian Financial Services Authority (“OJK”) has extended the deadline for public companies to hold annual shareholders meeting from June to 31 August 2020 at the latest. In light of this, OJK has also expedited issuances of new regulations as a legal ground for public companies to convene General Meeting of Shareholders (“GMS”) through the electronic shareholders meeting or e-RUPS system, which allows shareholders to avoid physical attendance during the Large-Scale Social Restriction (Pembatasan Sosial Berskala Besar/PSSB) period.
Regulations on electronic-general meeting of shareholders
The following are regulations issued by OJK on 21 April 2020 which regulate provisions regarding the convening of GMS electronically:
Based on the above regulations, convening GMS electronically, which enables all attendees of the meeting to participate and interact virtually can be done by one of the following ways:
Electronic-General Meeting Shareholders System (Sistem Penyelenggaraan Rapat Umum Pemegang Saham Secara Elektronik/e-RUPS) (“e-GMS System”) is an electronic system or facility used to support the supply of information, implementation and reporting on GMS of public companies. The e-GMS Provider must be a (i) Depository and Settlement Institution appointed by OJK or (ii) other party which shall be an Indonesian legal entity and domiciled in Indonesia, as agreed by OJK.
Other than using a system by the e-GMS Provider, public companies are also allowed to convene GMS electronically using systems provided by them internally. In such a case, public companies must fulfill the requirements set out under POJK 15/2020, among others, registered as electronic system provider under the relevant authority. In their system, public companies must stipulate the mechanism for registration, appointment and revocation of power of attorney and mechanism for casting and/or changing votes under their standard operating procedures for convening GMS.
Shareholders of public companies are given alternatives to attend the shareholders meeting electronically by arranging proxies. The granting of proxy by shareholders can be done through e-GMS System provided by e-GMS Provider or other system provided by the public company. The granting of electronic proxy must be done no later than one business day prior to the convening of the GMS. Parties who can be appointed as e-Proxy to shareholders are:
Members of Board of Directors, Board of Commissioners and employees of public companies are not allowed to act as e-Proxy of shareholders.
In an electronic GMS, e-Voting can be made upon the invitation of GMS until the opening of the relevant agenda to be voted in the GMS. Votes which have been made prior to the GMS may be changed until before the chairman of GMS starts the relevant vote for the specific meeting agenda. Shareholders who have casted their vote electronically prior to the GMS is deemed to have attended the GMS. The confidentiality of the vote casted must be kept and ensured confidential until all votes are counted.
Guidelines to convene electronic GMS
Other relevant regulation
In conjunction with OJK’s regulations on electronic GMS, the Indonesia Central Securities Depository (Kustodian Sentral Efek Indonesia “KSEI”) issued its letter No. 4164/DIR/2020 on 3 April 2020 regarding implementation of the KSEI Electronic General Meeting System (“eASY.KSEI”) Facility as an Electronic Authorisation Mechanism for General Meeting of Shareholders of Issuers. Here, Issuers refer to public companies which shares are deposited in KSEI’s collective custody. KSEI also provides a system called “eASY.KSEI” to enable GMS to be held virtually.
eASY.KSEI has two main features, e-Proxy and e-Voting. E-Proxy is a system which electronically facilitates and integrates the granting of authority by shareholders to the proxy. E-Voting is a system which electronically facilitates the attendance/quorum and voting process during a GMS so the shareholders can participate in the GMS virtually. Again, it is important to note that this platform is designated only for public companies that have shares deposited in KSEI’s collective custody.