Executive blasts new capital market law
Executive blasts new capital market law
JAKARTA (JP): The new capital market law to some degree impedes the movement of publicly-listed companies which have no major shareholders, an executive said yesterday.
Rini M.S. Soewandi, a director at PT Astra International, said at a seminar that the law does not especially address such companies. Therefore, they are subject to articles designed for those with majority shareholders.
"I understand that the law focuses on assuring increased protection on minority shareholders because many listed companies are still controlled by their majority shareholders.
"However, it creates problems to companies with no major shareholders like Astra," Rini told a seminar on the capital market law, which was hosted by the Prasetio Utomo law firm.
As of last September, Astra International was 54 percent owned by public investors, 10 percent by Delta Mustika, 8 percent by Toyota Motor Corp. of Japan and the remainder by other institutions and individuals.
Rini noted that almost all of the seven state-owned banks are affiliated to Astra, and therefore any deals with those banks may contain conflicts of interests.
She also noted that the preemptive rights, granted by the law to existing shareholders the first opportunity to buy a new issue of stocks, bring additional costs to Astra when issuing rights stocks or convertible bonds.
Because of article 95 of the law, the company faces difficulty in allocating and selling new shares to its employees, Rini said.
"Under a special program, we want our employees to become shareholders of Astra by selling them new shares which they can pay by installment over five years," Rini told journalists after the seminar.
"However, we cannot yet materialize our plan because article 95 of the capital market law bars us from doing so," she continued.
Article 95 stipulates that "internal people" of an issuing company or a pubic company, which possess inside information, may not buy or sell stocks of the company or other affiliated companies.
According to the explanatory notes on point one of article 95, internal people include commissioners, directors and employees of a public company.
Ruling
She suggested that the Capital Market Supervisory Agency introduce a ruling which gives special treatment to public companies which have no majority shareholders.
Responding to Rini's suggestion, I Nyoman Tjager, head of the agency's legal bureau, said at the same seminar that his agency will consider her suggestion.
"It clearly needs ways out or solutions for those problems faced by public companies with no majority shareholders... Therefore, we want your positive inputs presented to us," Nyoman said.
Meanwhile, the agency's chairman, I Putu Gede Ary Suta, announced yesterday that today the agency will issue 86 rulings on 88 stock market-related issues to implement the capital market law. (rid)