INDONESIA Law and Practice Contributed by: Alvin Suryohadiprojo and Dimas Nandaraditya, KARNA
company law, a ROFR provision is not manda - tory in companies’ articles of association. A tag-along right provides a right for the non- transferring shareholders to join the sale of shares by a transferring shareholder. Commonly, a tag-along right is granted to minority share - holders to ensure fair treatment in the event of a sale of the company. To avoid confusion, in a ROFR, the right-holder would be able to purchase the transferred shares offered by the transferring shareholder – whereas, in a tag- along right, the right-holder would be able to sell its shares alongside the transferring shareholder. A founder lock-up is often included in share - holders’ agreements to provide stability and continuity to the start-up during critical periods of growth or transition. It is also used to align the interests of founders with other stakeholders and investors, as well as to mitigate the risk of founders exiting the company prematurely. 6.2 IPO Exits The Indonesian market has experienced two landmark IPOs in the tech start-up industry. Bukalapak, an e-commerce platform, is the first technology unicorn company listed in the Indo - nesian Stock Exchange (IDX). Bukalapak raised fresh funds of IDR21.9 trillion (approximately USD1.5 billion, according to the applicable cur - rency rate at the IPO), the highest IPO proceeds in the history of the IDX. GoTo raised IDR15.8 trillion (approximately USD1.1 billion, accord - ing to the applicable currency rate at the IPO) and was participated in by 300,000 investors, the highest number ever to take part in an IPO on the IDX. These two successful IPOs demon - strate the market’s enthusiasm for tech start-up companies’ shares, despite the less-than-joyful current stock price developments.
The IDX requires a company to meet one of the following financial criteria in order to list its shares on the Main Board of the IDX: • profits before tax and net tangible assets for the previous financial year of at least IDR250 billion (approximately USD16.50 million); • accumulation of profits before tax for the pre - vious two financial years of at least IDR100 billion (approximately USD6.66 million) and share capitalisation value of at least IDR1 tril - lion (approximately USD66.66 million) before the listing date; • revenue for the previous financial year of at least IDR800 billion (approximately USD53.33 million) and share capitalisation value of at least IDR8 trillion (approximately USD533.33 million) before the listing date; • total assets for the previous financial year of at least IDR2 trillion (approximately USD133.33 million) and share capitalisation value of at least IDR4 trillion (approximately USD266.66 million) before the listing date; or • cumulative cash flow from operating activi - ties for the previous two financial years of at least IDR200 billion (approximately USD13.33 million) and share capitalisation value of at least IDR4 trillion (approximately USD266.66 million) before the listing date. To assist less-developed companies in going public, the IDX provides avenues in the form of the Development Board and the Acceleration Board, which have easier-to-meet requirements (particularly regarding the company’s financial capabilities). Given that this industry is still new to the Indone - sian market, regulators have introduced several specific provisions for tech start-up IPOs. One of them is the introduction of multiple voting shares (MVS), whereby a single share can carry more
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