INDONESIA Law and Practice Contributed by: Jufrian Murzal and Enos Martryn Budiman, Murzal and Partners
These requirements may affect the implementation of stakebuilding transactions, particularly where share - holder approval is required and the shareholder base is large or dispersed. Additional hurdles may arise in regulated sectors, where changes in share ownership may require prior approval from the relevant regulatory authorities. In the case of public companies, capital markets regulations also apply. In certain circumstances, an exemption from the mandatory tender offer require - ment may apply where a new controller acquires shares gradually by purchasing no more than 10% of the shares within any 12-month period, subject to the Indonesian law does not contain a specific regulatory framework governing the use of derivative instruments in M&A transactions, nor does it generally prohibit their use in structuring investments. In practice, certain financial instruments with deriva - tive characteristics may be used in acquisition struc - tures, particularly where parties seek flexibility in tim - ing or valuation. These may include instruments such as convertible bonds, exchangeable bonds, warrants, medium-term notes or long-term notes, which allow the holder to convert the instrument into shares at a later stage. However, the regulatory implications of such instruments are typically assessed based on their legal effect. Where the instrument ultimately results in the acquisition of shares or a change of control, the relevant corporate, capital markets or competition law requirements may apply. 4.5 Filing/Reporting Obligations Indonesian law does not generally impose a stan - dalone filing or reporting obligation merely because an acquisition structure involves derivative or derivative- like instruments. Instead, the regulatory analysis typi - cally depends on the legal effect of the instrument, in particular whether it results in an acquisition of shares, a change of control, or a disclosure-triggering event under the applicable capital markets rules. applicable regulatory conditions. 4.4 Dealings in Derivatives
From a competition law perspective, merger control issues would generally arise only when the exercise, conversion or settlement of the relevant instrument results in an acquisition of shares or assets that meets the applicable thresholds and gives rise to control or the relevant competitive effect under the KPPU frame - work. From a securities law perspective, where the relevant instrument is issued by or converted into securities of a public company, disclosure and/or filing requirements may arise under the applicable OJK capital markets regime, including in relation to capital increases, con - vertible instruments and changes in share ownership Indonesian law does not generally require sharehold - ers acquiring shares in a private company to disclose the purpose of their acquisition or their intentions regarding control of the company. In the context of public companies, disclosure obliga - tions arise primarily under the capital markets trans - parency regime administered by the OJK. Under OJK Regulation No. 4 of 2024 on Reports of Ownership or Changes in Ownership of Shares in Public Compa - nies, any party that directly or indirectly holds at least 5% of the voting shares of a public company must report such ownership to the OJK and disclose it to the public. Any subsequent change in that ownership must also be reported within the prescribed report - ing period. These obligations apply to both direct and indirect ownership structures and extend to control - ling shareholders. following conversion. 4.6 Transparency These rules focus on transparency of ownership rather than disclosure of intentions. Indonesian law does not impose a general obligation requiring shareholders to disclose the purpose of their acquisition or their stra - tegic intentions regarding control, except in specific transactional contexts such as tender offers.
602 CHAMBERS.COM
Powered by FlippingBook