Expert warns on minority shareholders protection law

Expert warns on minority shareholders protection law

JAKARTA (JP): The protection of minority shareholders as
guaranteed by the law on limited liability companies should not
create a new tyrant, a corporate lawyer said here yesterday.

"Under the old law, majority shareholders held so much power
that they often seemed to act as tyrants. I hope now minority
shareholders will not abuse their rights guaranteed by the new
law and act themselves as tyrants," Rudhi Prasetya of the
Surabaya-based Airlangga University cautioned.

Rudhi was one of the speakers at a seminar on the consequences
of the enforcement of the new law on limited liability companies
organized by the Association of Indonesian Public Companies and
the Center for Law Studies Foundation.

Rudhi said that the protection of minority shareholders is
provided in the articles 66, 85 and 117 of the law.

The stipulations give minority shareholders, who account for
up to 10 percent of the total shares of a company, the right to
ask for court orders to hold annual meetings of shareholders. The
new rules also allow minority shareholders to sue directors or
commissioners for wrongdoings which cause losses to the company
and they allow minority shareholders to ask for a court order to
liquidate a company.

Rudhi added that minority shareholders also have a right now
to an inquiry which allows them, through a court order, to have
access to documents and assets of any company under suspicion of
unlawful practices.

However, Rudhi seems confident that minority shareholders will
be prevented from excessive control over companies as long as
court judges are careful in resolving conflicts between minority
and majority shareholders.

Kartini Muljadi, the chair of a law firm, said that the
minority protections as provided by the law are a positive
development in Indonesian law.

She expects that the government will soon issue regulations to
implement the new law. (04)