Before a Public Takeover Bid | Indonesia | Global Public M&A Guide

3. Before a Public Takeover Bid

[Last updated: 1 January 2025, unless otherwise noted]

3.1 Shareholders' rights

The following table describes the spectrum of “control” of public companies in Indonesia that investors should consider:

Shareholding Ownership	Key rights under the Company Law (subject to stricter provisions in the articles of association)
One share	The right to file a lawsuit against the company if the shareholder has been harmed by actions of the company which it considers unfair and with no reasonable grounds, as a result of resolutions of the general meetings of shareholders, board of directors' meetings and/or board of commissioners' meetings of the company; The right to request the company to purchase its shares at a fair price if the shareholder disagrees with certain actions taken by the company which cause losses to the company or the shareholder; The right to access and inspect the register of shareholders, special register, minutes of general meetings of shareholders, circular resolutions, financial documents and other documents of the company; and The right to request the dissolution of the company on the grounds that it is impossible to continue the company's operations.
At least 10% of the issued shares with voting rights	The right to request that a general meeting of shareholders be convened; The right to file a lawsuit on behalf of the company against the board of directors, the board of commissioners, a member of the board of directors or a member of the board of commissioners; and The right to request that an examination be conducted into the company if there is "reason to suspect" that the company has committed an unlawful act which is detrimental to the shareholders or to third parties, or that the board of directors or the board of commissioners of the company have committed unlawful acts that are detrimental to the company, the shareholders or third parties.
More than 50% of the issued shares with voting rights	The right to approve other matters that are required to be approved by the general meeting of shareholders but that are not subject to a higher threshold; The right to appoint members of the board of directors and the board of commissioners; and The right to approve an increase of paid up and issued capital.
At least 66.7% of the issued shares with voting rights	The right to approve amendments to the articles of association of the company; The right to approve an increase of the authorized capital; and The right to approve a buyback or repurchase of shares and a reduction of capital of the company.
At least 75% of the issued shares with voting rights	The right to approve the submission of a bankruptcy petition to the court; The right to approve the dissolution of the company; and The right to approve the transfer or encumbrance of all or more than one-half of the company's net assets in one accounting year, either in one or in a series of transactions.

3.2 Procedures for Trading Public Company Shares on the IDX

The sale and purchase of public company shares may be carried out in the regular, cash or negotiated markets on the IDX. Parties intending to trade shares should instruct brokers registered with the IDX. The transfer settlement is done through the C-BEST System in the Indonesian Central Securities Depository (Kustodian Sentral Efek Indonesia).

3.3 Insider trading

Indonesian insider trading regulations are contained in Articles 95 to 99 of the Capital Markets Law and are quite restrictive. Generally, Indonesian insider trading regulations provide that individuals who obtain insider information due to their positions or professions, or due to business relationships with a public company, are considered to be insiders for a period of six months after the relationship ceases. "Insider information" means any material information¹ of a price-sensitive nature that an insider has and that is not yet available to the public.

Insiders in possession of insider information are prohibited from buying or selling securities of the public company, or of other companies engaged in transactions with the public company. The following individuals will be considered as insiders with respect to insider trading:

Commissioners, directors or employees of a public company.
Principal shareholder(s) of a public company (shareholders directly or indirectly holding 20% shares of the public company).
Individuals who, due to their position, profession or business relationship with a public company, are able to obtain inside information.
Parties who, within the six months before the relevant date, fell into one of the above categories.

If an insider wishes to sell its shares while holding insider information, this can only be done if the buyer has the same information. OJK Rule No. 78/POJK.04/2017 on Securities Trading That is Not Prohibited for Insiders ("OJK Rule 78") exempts off-the-exchange securities transactions between an insider in possession of insider information and a party who is a non-insider, so long as:

All insider information must be disclosed to the party who is a non-insider.
The party who is a non-insider cannot use the insider information other than for the purpose of transactions with that particular insider.
The party who is a non-insider must make a written statement (sign a confidentiality agreement) that all the insider information obtained will be kept confidential and will not be used for purposes other than the proposed securities transaction with the relevant insider.
The party who is a non-insider cannot trade in (i) the relevant public company's securities or (ii) the securities of other companies engaged in transactions with the public company, for a six-month period from the date the party who is a non-insider obtains that insider information, other than with the relevant insider.

Insiders and other parties conducting transactions that are exempted under OJK Rule 78, must submit a report to the OJK concerning the transaction within 10 calendar days after the completion of the transaction.

[1] Capital Markets Law defines “material information” as important and relevant information regarding events or occurrences that may affect the price of securities on the IDX, or the decisions of investors, financiers, prospective investors or financiers, or other interested parties.

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