INDONESIA Law and Practice Contributed by: Jufrian Murzal and Enos Martryn Budiman, Murzal and Partners
6.11 Irrevocable Commitments In practice, certain transactions may include a pre- closing condition requiring an irrevocable undertaking from the principal shareholder of the target company to approve the transaction at the GMS. Such under - takings are commonly used to provide greater cer - tainty that the necessary shareholder approval will be obtained.
7.3 Producing Financial Statements In Indonesian public company transactions, bidders are generally required to disclose their financial capa - bility and the source of funds in the relevant tender offer documentation. However, there is no general requirement for bidders to include full pro forma finan - cial statements solely for purposes of a takeover offer. Pro forma financial information may nevertheless be required in other contexts, such as mergers or mate - rial corporate actions, depending on the nature of the transaction and the applicable OJK requirements. Where financial statements are required, they are gen - erally expected to be prepared in accordance with Indonesian Financial Accounting Standards (SAK/ PSAK), which are closely aligned with, and in many respects converged with, IFRS. In practice, financial statements used for regulated capital markets pur - poses are typically audited by a public accountant registered with the OJK. 7.4 Transaction Documents In private M&A transactions in Indonesia, there is generally no requirement to publicly disclose the full transaction documents. Agreements such as share purchase agreements typically remain confidential between the parties, subject only to limited reporting obligations to regulators or shareholders. In public company transactions, disclosure obliga - tions are more extensive under OJK regulations. While the full agreements are not usually required to be published, material information must be disclosed through public announcements and regulatory filings. In certain transactions, such as material or affiliated transactions, additional disclosures such as summa - ries, fairness opinions and supporting reports may also be required.
7. Disclosure 7.1 Making a Bid Public
In Indonesia, a bid becomes public through the announcement of a tender offer in accordance with the applicable OJK regulations. In the case of a mandatory tender offer which arises following a change of control of a public company, the new controlling shareholder must announce the tender offer to the public and submit the tender offer statement to the OJK. The announcement typically includes key information such as the identity of the bidder, the offer price, the number of shares subject to the offer and the offer period. A voluntary tender offer is initiated at the bidder’s discretion and becomes public once the tender offer announcement is made and the relevant documents are submitted to the OJK. In both cases, the process is subject to OJK super - vision to ensure transparency and compliance with capital market regulations. 7.2 Type of Disclosure Required Under the Company Law, the issuance of new shares generally requires approval from the GMS. Where the share issuance forms part of a transaction resulting in a change of control, the proposed acquisition must also be announced in at least one nationally circu - lated Indonesian newspaper prior to the GMS. This announcement serves to notify creditors and other stakeholders as part of the statutory transparency requirements for control transactions.
8. Duties of Directors 8.1 Principal Directors’ Duties
Under the Company Law, directors must perform their duties in good faith, with due care and full responsi - bility for the benefit of the company. In the context of a business combination, the board of directors is responsible for ensuring that the transaction is com -
606 CHAMBERS.COM
Powered by FlippingBook