The Financial Services Authority (Otoritas Jasa Keuangan - OJK) issued Rule No. 14/POJK.04/2019 on Amendment to Rule No. 32/POJK.04/2015 (POJK 32/2015) on Increase of Capital of Public Companies With Preemptive Rights (POJK 14/2019). The rule came into effect on 30 April, but a copy of this rule was only been made available to the public recently.
POJK 14/2019 consolidates POJK 32/2015 and POJK No. 38/POJK.04/2014 on Increase of Capital of Public Companies Without Preemptive Rights (POJK 38/2014) by revoking POJK 38/2014, and amending the provisions that were contained in POJK 38/2014 and incorporating them into POJK 32/2015.
POJK 14/2019 tightens the shareholders’ approval requirement for a non-preemptive rights issuance (NPR) of a public company that is NOT in financial distress by requiring the public company to obtain the approval of its independent shareholders and unaffiliated shareholders in a general meeting of shareholders (GMS).
This change in essence means that public companies' controlling and affiliated shareholders will now NOT be able to vote in a GMS to approve an NPR, which makes it challenging for public companies not in financial distress to carry out an NPR going forward.