Key Changes on New OJK Regulation on Public Company Takeover

by Allen & Overy LLP

Allen & Overy LLP

The OJK recently passed Regulation No.9/POJK.04/2018 on Public Company Takeover, which revokes Rule No.IX.H.1. Key changes under the new regulation are a) a takeover that is carried out through a rights issue of the target listed company is no longer exempt from the MTO obligation; b) the MTO can be carried out by a more than 50%-owned subsidiary of the acquirer; and c) there will be no extension (beyond the two year period) in carrying out the sell-down obligation following a takeover and MTO.


On 25 July 2018, the Financial Service Authority (Otoritas Jasa Keuangan, the OJK) passed Regulation No.9/POJK.04/2018 on Public Company Takeover (POJK 9/2018). The regulation came into effect on 27 July 2018. This rule revoked Bapepam-LK Rule No.IX.H.1, attachment of the Decree of the Chairman of Bapepam-LK No.KEP-264/BL/2011 on the same topic (Rule IX.H.1).

Some basic principles in POJK 9/2018 are similar with Rule IX.H.1 that it revokes. POJK 9/2018 however introduces critical changes to the public company takeover regime as follows:

  • In general, a takeover that is carried out through a rights issue of the target listed company is no longer exempted from the obligation to carry out a Mandatory Tender Offer (MTO). 
  • The MTO obligation that follows a takeover can be carried out by a more than 50%-owned subsidiary of the acquirer. 
  • The rule does not cater for application to OJK for time extension (beyond the two year period) in carrying out the sell-down or re-float obligation that follows a takeover and MTO. 


OJK takeover rule primarily governs on the change of control over an Indonesian public company. The previous takeover regime, Rule IX.H.1, and the current rule, POJK 9/2018 provides in effect that every change of control over an Indonesian public company, the new Controlling Shareholder must undertake a MTO to purchase the remaining shares in that public company save for shares of certain exempted parties.

POJK 9/2018 focuses on enhancing public disclosure with regards on public company takeover and notably tightening provisions relating to MTO and the sell-down requirement.

This article is intended to be a summary of the key provisions that might affect a takeover structure and should not be considered as a substitute for specific legal advice in particular circumstances. We do not specifically discuss or summarise all disclosure items under POJK 9/2018 that we consider remain unchanged materially from those govern under Rule IX.H.1.

Controlling Shareholder and the Ability to Control

POJK 9/2018 defines "Controlling Shareholder" as a Party, that directly or indirectly: (i) holds more than 50% of the total issued shares with voting rights; or (ii) has the ability to determine, directly or indirectly, in any way the management and/or policy of the public company.

This new definition amended the definition of "Controlling Shareholder" as provided under Rule IX.H.1 by adding phrases "directly or indirectly" ahead of limb (i) above vis-a-vis the shareholding thresholds. This effectively clarifies the ‘direct and indirect’ concept that has been reflected in Rule IX.H.1. 

Article 2 of POJK 9/2018 and its elucidation essentially explain that the ability of a shareholder to influence the management and policy over the public company could be evidenced by any document and/or information, which shall include the following:

  • any agreements with other shareholders that enable it to have more than 50% voting powers;
  • any authority to manage financial and operation under the public company’s articles of association or agreements;
  • any authority to appoint or dismiss majority member of the board of directors and the board of commissioners who control the public company through directors or commissioners;
  • any powers to dominate majority votes in the board of directors’ and the board of commissioners’ meeting enabling them to control the public company; and/or
  • any other powers indicating control over the public company.

Change of Control

There are no major changes made to the consequences of any change of control of the public company under POJK 9/2018. Notably, the new Controlling Shareholder remains obligated to undertake an MTO to purchase the remaining shares in that companies save for:

  • the shares owned by shareholder(s) that entered into the takeover transaction with the new Controlling Shareholder;
  • the shares owned by any other party that has already obtained an offer based on the same terms and conditions as those from the new Controlling Shareholder;
  • the shares owned by any other party who, at the same time, also conducts an MTO or a voluntary tender offer for the shares in the same publicly listed company;
  • the shares owned by a principal shareholder (read: a shareholder holding more than 20% of the total issued shares of the public company); and
  • the shares owned by other Controlling Shareholder of the public company.

There is however a new provision inserted to deal with criterion of "control" or "controlling shareholders" in particular line of business or regulation such as banking, insurance, or multi-finance where the definition of "control" or "controlling shareholder" could be different with those as defined under POJK 9/2018. For this specific aspect, Article 3 of POJK 9/2018 explains that for the implementation of POJK 9/2018, the criterion of "controlling" shall refer to the control as provided under POJK 9/2018. For instance, a party holding more than 25% shareholding in an Indonesian bank shall be considered to be a controlling shareholder of the bank under the current applicable banking regulation. That said, if the new party comes to hold more than 25% of an Indonesian public company bank making it falls under the definition of control under the applicable banking regulation but it does not meet the requirement of "Controlling Shareholder" under POJK 9/2018, this new party will not be required to undertake an MTO.

MTO and Sell-Down Requirements

Another new provision introduced by POJK 9/2018 is the rights of the new Controlling Shareholders to appoint other party to conduct the MTO on the new Controlling Shareholder’s behalf following the change of control. Article 8 of POJK 9/2018 provides that the "other party" in this matter is a party whose shares are owned by the new Controlling Shareholders with more than 50% shareholding whether directly or indirectly. In this case, this other party will be subject to all the requirements under POJK 9/2018.

As with Rule IX.H.1, POJK 9/2018 also contains a sell-down requirement, which mandate any holder of shares in excess of 80% of a public company where those shares were acquired through an MTO to sell down to 80% within two years of the MTO and retain a minimum public float. However, POJK 9/2018 does not provide extension to the sell-down period. This means that, and as confirmed by OJK officer, the sell-down must strictly be completed within two years of the MTO. Failure to comply with the sell-down requirement will be subject to the sanctions as provided under POJK 9/2018 (see further Section 6 below). To that end, it remains to be seen on how OJK will exercise its powers on this matter given in reality that even if the sell-down period is extended, it is often challenging to have an agreement on the sale price, with the prospective buyers for the sell-down shares.


The following are the applicable exemptions for a new controlling shareholder(s) in relation to its obligation to disclose the acquisition and undertake an MTO in the event of takeover:

  1. due to marriage or heritage;
  2. by a party who does not own any shares in a public company by subscription or purchasing shares in the public company within each 12 months and for maximum 10% of the total paid-up shares;
  3. due to implementation of authorities of government body or institution or the state under the laws;
  4. due to a direct acquisition of shares owned or controlled by the government institution or state under the laws as meant in point (3) above;
  5. due to a final and binding court order or decision;
  6. due to mergers, spin-off, consolidation or liquidation;
  7. due to grants;
  8. due to enforcement of security, including enforcement of security in the context of company restructuring as determined by the government institution or state under the laws;
  9. by a shareholder following the exercise of its rights granted in a rights issue of the public company in accordance with the applicable OJK regulation on rights issue;
  10. by a party following the subscription of shares for the purpose of improving financial condition in accordance with a non pre-emption rights exercise under OJK regulation regarding non pre-emption rights;
  11. due to implementation of policies of the government institution or state;
  12. if implemented, will breach of any laws and regulations;
  13. due to implementation of voluntary tender offer under OJK regulation regarding voluntary tender offer;
  14. has been disclosed in a prospectus of and implemented by no later than a year after the issuance of an effective statement on equity securities public offering, to the extent the disclosure are made in accordance with OJK regulation regarding prospectus of equity securities issuance.

A key difference between Rule IX.H.1 and POJK 9/2018 is on the exemption applicable to takeover conducted through or in connection with a rights issue. POJK 9/2018 does not contain such broad exemption as in Rule IX.H.1. Instead, it only exempts a takeover that occurs in an existing shareholder exercising its preemptive right and acquiring proportionate shares that result in it becoming a new controller of the listed company, and not from acquiring additional rights from other shareholders. 

Under Rule IX.H.1, the phrase of point (9) above was stated "acquisition as a result of exercising it rights due to implementation of Rule IX.D.1 and Rule IX.D.4" and widely interpreted that any takeover through rights issue and non pre-emption rights issuance in which a new party (non-existing shareholder) comes as a standby purchaser in the public company’s rights issue making it as a new controlling shareholder of the public company will be exempted from the MTO requirement. However, POJK 9/2018 is no longer exempt from this aspect if the new controlling shareholder is not an existing shareholder of the public company before the rights issue. A takeover structure using this specific scenario will no longer be viable meaning that if a new controlling shareholder, as a result of implementation of its obligations as a standby purchaser and purchase rights from the existing shareholders of a public company, becomes a new controlling shareholder of the public company, that new controlling shareholder must undertake MTO post-rights issue.

Administrative Sanctions

It is very important to note that any non-compliance with the new rule will result in administrative sanctions from OJK that may be imposed without prior written notice. OJK may also impose other measures such as to delay the issuance of effective statements (e.g. merger’s and consolidation’s effective statements), or the confirmation of no other comments to the documents for a rights issue. OJK has, at its discretion, to inform the public of the company’s non-compliance. Some of these sanctions impose serious consequences, such as a fine and a revocation of the company’s business permit. However, it will be interesting to see how OJK will implement its supervision on compliance regarding this new regulation, especially on those relating to the mandatory sell-down requirements.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Allen & Overy LLP | Attorney Advertising

Written by:

Allen & Overy LLP

Allen & Overy LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at:

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit
  • New Relic - For more information on New Relic cookies, please visit
  • Google Analytics - For more information on Google Analytics cookies, visit To opt-out of being tracked by Google Analytics across all websites visit This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at:

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.