Insights

OJK has just issued Regulation No. 4 of 2024 on Report on Ownership or Any Change of Ownership in Public Company and Report on Activity in Securing of Shares of Public Company (“POJK 4/2024”). POJK 4/2024 however will only come into effect 6 months from 28 February 2024 (being its legislation date), hence will be replacing the existing OJK regulation i.e. Regulation No. 11/POJK.04/2017 on Report on Ownership and Any Change of Ownership in Public Company (“POJK 11/2017”) commencing from 28 August 2024.

Substantially, OJK 4/2024 provides similar reporting requirement as set out in POJK 11/2017, however this time around OJK has added additional reporting requirement related to: (i) ownership of controller of public company, and (ii) activity in securing of shares by ‘substantial shareholder’. It seems that OJK is also in the process of establishing a system which would allow the aforementioned reports to be submitted electronically.

Reporting requirement for director, commissioner, substantial shareholder and controller of a public company

For ease of comparison, we set out below a comparison of key differences/improvements between POJK 4/2024 and POJK 11/2017. ‘Substantial shareholder’ under POJK 4/2024 in this insight refers to a shareholder who directly or indirectly owns at least 5% of voting shares in a public company.

Matters	POJK 4/2024	POJK 11/2017
Parties	(i) director, (ii) commissioner, (iii) substantial shareholder, and (iv) controller (regardless the controller owns either more or less than 5% ownership of voting shares in a public company)	(i) director, (ii) commissioner and (iii) substantial shareholder (means any shareholder who directly or indirectly owns at least 5% of paid-up capital in a public company)
Trigger(s) for reporting	Any direct or indirect ownership and change in ownership of voting shares in a public company. (Remarks: a change in ownership will be triggered under the following circumstances: (i) for director and commissioner: any change in his/her ownership; and (ii) for controller and substantial shareholder: any change in the percentage number of the shares owned by the relevant party. If the percentage of ownership and the change in such percentage of ownership are fraction numbers, those will be rounded down without decimal for determining whether there is a change in shares ownership.)	Any direct or indirect ownership and change in ownership of shares in a public company. (Remarks: a change in ownership will be triggered under the following circumstances: (i) for director and commissioner: any change in his/her ownership; and (ii) for substantial shareholder: any change in its ownership of at least 0.5% of paid-up capital in a public company, either in a single or series of transactions.)
Definition of ‘organized group’	POJK 4/2024 has defined ‘organized group’ or ‘kelompok yang terorganisasi’ being a collective (i.e. several shareholders) who make plans, arrangement or decision to cooperate in achieving certain objectives. The required reporting for an organized group will be submitted by one of the shareholders.	Not defined
Reporting exemption	Any change in ownership of the shares owned by the party due to (i) capital increase in public company with or without pre-emptive rights, or (ii) any buyback of shares by public company, will further be exempted from the reporting requirement.	Not regulated
Requirement for substantial shareholder to report activity in securing of shares	Regulated	Not regulated
Form and content of the report	As per form attached in POJK 4/2024	As per form attached in POJK 11/2017
Deadline to report	5 days from the ownership or change in ownership of the shares of the party. Note that when electronic reporting method has been available, the deadline will be 3 days from the ownership or change in ownership of the shares of the party.	10 days from the ownership or change in ownership of the shares of the party. If it is done by attorney/proxy of the party, 5 days from the ownership or change in ownership of the shares of the party.
Sanctions	OJK may impose administration sanctions in the form of written warning, fines, limitation of business activities, freezing or revocation of business license and cancellation of approval and registration. OJK also may impose certain measure e.g. prohibition for director, commissioner or shareholder of the public company becoming primary party (Pihak Utama) in financial service institutions.	OJK may impose administration sanctions in the form of written warning, fines, limitation of business activities, freezing or revocation of business license and cancellation of approval and registration. OJK also may impose certain measure e.g. postponement of grating of statement of effectiveness etc.

Reporting requirement in securing of shares 

A substantial shareholder will be required to report to OJK when the shareholder is securing at least 5% of its voting shares, either in a single or series of transactions. Furthermore, POJK 4/2024 also requires the shareholder to report any changes in the percentage of the shares that is previously secured by the shareholder. Similar to the reporting requirement for substantial shareholder and/or controller, a change is deemed to happen should there is any change in the percentage of the shares that are secured, provided that if the percentage of shares that are secured is fraction number, it will be rounded down without decimal.

The report contains, among others, (i) shareholder’s details, (ii) percentage and total of shares ownership, (iii) loan value, (iv) date and period of the agreement which underlies the securing, and (v) nature of affiliate relationship (if any) – which form is attached in POJK 4/2024.

The report must be submitted within 5 days from date of signing of the agreement which underlies the securing of the shareholder’s shares.

Few takeaways

The issuance of POJK 4/2024 appears to be an effort from OJK to, once again, propel and monitor public company as well as director, commissioner, substantial shareholders and controller of public company observing the disclosure of information. While the requirement mainly has been provided in the previous POJK 11/2017, we expect that the changes would affect compliance activities for public company going forward.

We also welcome the online reporting method as indicated in the regulation, as this should make the process simpler for the parties. Further updates on this should be expected soon and hopefully prior to POJK 4/2024 becoming effective on 28 August 2024.

In a share-backed loan transaction involving shares in Indonesian public company, both borrower and lender should now be aware on this. Lender would want to include evidence of the reporting in its checklist if the securing of shares by substantial shareholder indeed triggers the reporting requirement.

*Eirene Lamtiur Setyawati (Associate) assisted in the preparation of this insight.

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