Bapepam issues new rules for public companies<\/p>\n
JAKARTA (JP): Publicly listed companies wishing to change
\ntheir core businesses must involve an independent consulting
\ncompany in the decision, according to a new capital market
\nregulation.<\/p>\n
The regulation, one of two new regulations issued by the
\nCapital Market Supervisory Agency (Bapepam) on Monday, stipulates
\nthe change in core business should be based on a consultant's
\nrecommendation.<\/p>\n
"The involvement of an independent consultant is important to
\nprotect minority shareholders and to ensure that the change in
\ncore business will give shareholders added value," Freddy
\nSaragih, the head of the financial assessment bureau at Bapepam,
\nsaid while unveiling the regulations.<\/p>\n
The new regulation was issued amid a controversy surrounding
\nlife insurance company PT Lippo Life's recent decision to expand
\nits activities into the Internet business.<\/p>\n
The insurance company has changed its name to PT Lippo E-Net
\nto mark its commitment to the Internet. The public perceived the
\nchange in the company's name and the transfer of most of its life
\ninsurance portfolio to other companies as a change in the
\ncompany's core business.<\/p>\n
Analysts said this change would harm the investing public in
\nthe short term given the lack of disclosure from the company
\nregarding its move. The company's management, however, denied it
\nhad shifted its core business.<\/p>\n
The new regulation also requires a company's management to
\nprovide detailed explanations to the public about any planned
\nchanges in its core business, Freddy added.<\/p>\n
Companies also must have adequate human resources in the area
\nof the new core business before they can make the move.<\/p>\n
Freddy said the feasibility study and the explanation to the
\npublic had to be completed at least 28 days prior to the
\ncompany's shareholders meeting to vote on the move. He added that
\na report on the feasibility study had to be easily accessible by
\nthe general public.<\/p>\n
If shareholders reject the shift in core businesses, the
\ncompany's management can resubmit the proposal only after 12
\nmonths, Freddy said.<\/p>\n
Takeover<\/p>\n
Bapepam also issued a regulation on the acquisition of more
\nthan 20 percent of a company's shares through the stock market,
\nreplacing the outdated tender offer regulation.<\/p>\n
Under the new company takeover regulation, an investor wishing
\nto purchase 20 percent or more of a company's shares must also be
\nwilling to buy the remaining shares held by minority
\nshareholders, if these shares are offered for sale.<\/p>\n
Minority shareholders, or those who own less than 20 percent
\nof a company's shares, should be given the opportunity to keep
\ntheir shares or sell them, particularly if they do no longer
\ntrust in the company's prospect.<\/p>\n
"The investor is subject to Bapepam's company takeover
\nregulation, because the (above) investor is considered the one
\nwho will control the company," said Freddy.<\/p>\n
Under the previous tender offer regulation, investors
\npurchasing 20 percent or more of a company's shares were required
\nto carry out a tender offer, but did not have to purchase
\nadditional shares offered by the remaining minority shareholders.<\/p>\n
Bapepam also revised regulations on the guidelines of
\nfinancial reporting by companies and the rules surrounding rights
\nissues.<\/p>\n
In the revised version of the regulation on rights issues,
\nshareholders entitled to buy a company's rights shares are those
\nregistered 11 days after the shareholders meeting. Under the
\nprevious regulation, shareholders had to be registered one day
\nprior to the shareholders meeting if they wished to purchase a
\ncompany's rights shares. (udi)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bapepam-issues-new-rules-for-public-companies-1447893297",
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"sponsor": "Okusi Associates",
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