OJK Amends Plan and Procedures to Conduct Shareholders Meetings for Public Companies
On 14 March 2017, the Financial Services Authority (Otoritas Jasa Keuangan - OJK) issued an amendment to OJK Rule No. 32/POJK.04/2014 on the Plan and Procedures to Conduct General Meetings of Shareholders (GMS) for Public Companies, by issuing OJK Rule No. 10/POJK.04/2017 (New Rule).
While generally there is no significant change in the procedures for convening a GMS (eg, timeline), the New Rule adds provisions regarding:
(a) GMS of Public Companies that have different classes of shares (such as preferred shares or shares without voting rights).
(b) The appointment and dismissal of a Public Company's external auditor (public accountant).
What the rule says
GMS of Public Companies that have different classes of shares
For Public Companies that have different classes of shares, a GMS in which the rights attached to the shares will be changed must now be conducted in the following manner:
(a) A GMS that discusses a change of rights may only be attended by the shareholders who are affected by that proposed change (Affected Shareholders).
(b) The New Rule provides an explanation as to what is considered as "Affected Shareholders", as follows:
(i) If the agenda of the GMS is to reduce the rights of a particular class of shares, the Affected Shareholders will be the shareholders of the class of shares whose rights will be reduced.
(ii) If the agenda of the GMS is to increase the rights of a particular class of shares, the Affected Shareholders will be the shareholders of the other class(es) of shares whose rights will NOT be increased.
(c) Unless the articles of association of the relevant Public Company or other rules and regulations provide a higher threshold:
(i) The GMS must be attended by the holders of at least three-quarters of the total shares held by the Affected Shareholders.
(ii) A resolution can be passed if it is approved by the holders of three-quarters of the total shares held by the Affected Shareholders who attend the GMS.
(d) If the Affected Shareholders hold non-voting shares, this New Rule grants a right for those Affected Shareholders to attend and cast votes in the GMS that discusses a change of rights of shares by which they are affected.
Appointment and Dismissal of the Public Companies' external auditor (public accountant)
The appointment and dismissal of an external auditor must be decided through a GMS by taking into consideration the board of commissioners' (BOC) recommendation. If the GMS does not appoint an external auditor, the GMS may delegate its authority to appoint the external auditor to the BOC by:
(a) explaining the reasons for delegating such authority; and
(b) setting out certain criteria for an external auditor/public accountant that can be appointed by the BOC.