New bourse bill must anticipate hostile takeovers
New bourse bill must anticipate hostile takeovers
JAKARTA (JP): Christianto Wibisono, director of the Indonesian
Business Data Center, suggested yesterday that the government and
the House of Representatives eliminate loopholes in the stock
market bill to prevent hostile takeovers and privatization
practices.
Speaking in a discussion on the stock market bill conducted by
the House's ruling Golkar faction, Christianto warned the
government and the House that practices of company acquisitions
through stock exchanges, including hostile takeovers and
privatization, are becoming sophisticated.
"The bill needs to be rewritten in more detail and not one-
sided, especially concerning conflicts between independent
shareholders in an internal acquisition," Christianto said.
The House is scheduled to form a special team to deliberate
the stock exchange bill later this week. The bill is expected to
be passed into law later this year.
Hostile takeovers and privatization are actions taken by
certain investors to obtain majority stakes in companies listed
on a stock exchange.
Hostile takeovers and privatization come under scrutiny after
obscure businessman Jopie Widjaya and his business associates
acquired a majority stake in the publicly-listed Bank Papan
Sejahtera.
Hostile
Economist Sjahrir called the acquisition of the bank as a
hostile takeover, while Chairman of the Capital Market
Supervisory Agency Bacelius Ruru called it as a process of going
private.
In the United States, where stock market laws are advanced,
hostile takeovers and privatizing are regulated clearly. Laws
require investors to follow complicated and transparent
procedures before acquiring a company through a stock exchange.
"When investors silently raid a company -- when they are
already holding a certain percent of shares or when they are at a
trigger point -- they are required to announce their intention to
take over the company and offer an open tender-over," Christianto
said.
According to Indonesia's legal basis for stock markets, those
who already hold five percent of a company's shares through stock
markets are required to report it to the Stock Markets
Supervisory Agency.
"When an investor holds five percent of a company's shares it
is not enough for him to report it to related institutions. He
has to announce his intention and strategies," Christianto said.
In the case of Bank Papan Sejahtera, in which "the unwanted
practice" has already happened, Christianto suggested that the
investors -- Jopie and his associates -- have to undergo the
privatization processes by acquiring the rest of the bank's
shares with prices at the level of privatizing transactions.
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