This regulation has been in effect since December 31, 2024. This new regulation introduces several changes and clarifications regarding disclosure requirements, situations where the OJK may exercise its authority to determine the controller of a publicly-listed company, and delisting and go-private procedures, among other aspects. This alert highlights the main features and implications of OJK Regulation 45/2024.
A shorter timeframe to disclose any material information or facts
Prior to the enactment of OJK Regulation 45/2024, any information or material facts had to be disclosed to the OJK and the public by no later than two business days after becoming aware of such information or material facts, in accordance with OJK Regulation No.31/POJK.04/2015 on Disclosure of Information or Material Facts (OJK Regulation 31/2015).
This obligation has been amended by OJK Regulation 45/2024, which now requires a public company to report to the OJK and announce to the public the disclosure of information or material facts immediately upon becoming aware of such material information, or by no later than the commencement of the first IDX trading session on the subsequent trading day (which is at 9am Jakarta time). This appears to be an implementing provision of Article 86(1)(b) of Law No. 8 of 1995 on capital markets (as amended by Law No. 4 of 2023 on Development and Enhancement of Financial Sectors), which mandates a disclosure of any material information that may affect the share price immediately upon the occurrence of such event without any specific deadlines.
Failure to comply with the requirements set out above may result in the public company being subject to administrative sanctions imposed by the OJK. These sanctions can range from a written warning to, more commonly, a monetary fine of IDR2 million per day of delay, in accordance with Article 96(1)(f) of OJK Regulation 3/2021 (as defined below).
Determination of controller
As a refresher, under OJK Regulation No. 3/POJK.04/2021 on Implementation of Activities in Capital Markets (OJK Regulation 3/2021), in a “certain situation” (which was described as a situation where a public company cannot designate a controller because its majority shares are held by the public), the OJK has the authority to designate the controller of a public company.
OJK Regulation 45/2024 amends the description of a “certain situation” to read as follows (verbatim):
“Certain situation includes:
(i) having the ability to decide on the appointment and termination of the majority of directors and board of commissioners of a public company by controlling voting rights of a public company;
(ii) having the ability to control or determine material operations, appointment of key personnels and other matters pertaining a public company.”
The above mendment appears to further elaborate limb (b) of the definition of “Controller” under OJK Regulation No. 9/POJK.04/2018 on Takeover of Public Company (OJK Regulation 9/2018). This definition pertains to a party that has the ability to determine, whether directly or indirectly and by any means, the management and/or policy of a public company.1 Notwithstanding the foregoing, these changes do not affect the OJK’s ever-present authority to designate a controller, particularly in scenarios where it is not possible to identify a controller or controllers within a public company.
It remains to be seen how the OJK will exercise its authority to impose legal consequences on parties designated as controllers under OJK Regulation 45/2024, particularly regarding the obligation to complete a mandatory tender offer pursuant to OJK Regulation 9/2018. More broadly, a controller will enjoy the same corporate veil protections under Indonesian company law, except in cases where it is responsible for losses incurred by the public company due to its bad faith or unlawful acts. While recognizing the importance of identifying a controlling shareholder for regulators and public shareholders to ensure accountability, the primary concern lies in the potential repercussions of an incorrect, unilateral determination regarding the public company’s controlling shareholder. If such a determination is factually inaccurate, the public company may encounter significant issues, including the dissemination of incorrect information about its controlling shareholder.
Delisting and go-private
OJK Regulation 45/2024 compiles and reiterates the current regimes on delisting and go-private process, which are essentially categorized into three types: (a) voluntary delisting, (b) OJK-forced delisting, and (c) IDX-forced delisting. A delisted company must go private and tender or buy back its shares to reduce its shareholders to less than 50 (or any other amount as determined by the OJK).
Reducing the number of shareholders to be less than 50 has been the main hurdle for this process since shareholders cannot be forced to sell their shares and there is no mandatory “squeeze out” process under Indonesian law. As outlined below, OJK Regulation 45/2024 governs some improvement in the delisting procedures, but so long as the key issue on taking a public company private is not addressed, we do not see that this will significantly encourage the practices of go-private transactions.
OJK Regulation 45/2024 adds the following details on the delisting and go-private procedures:
(a) Additional legal grounds for the IDX to issue a delisting order in the following situations: (i) failure to convene an annual GMS for the last two years before the delisting; (ii) failure to submit a periodical report for the last two years before the delisting; (iii) violation of the capital markets laws and regulations, where a controller benefits from or causes the violation; and/or (iv) other situations as determined by the OJK. The rest of the requirements and the buyback price are the same as those applicable for IDX-forced delisting.
(b) More flexibility for the IDX to issue a delisting order for any failure to comply with listing requirements. Previously, under OJK Regulation 3/2021, an IDX-forced delisting process arising from this situation could only commence when the OJK issued an order to go private, which must first be requested by the IDX. The IDX can now issue a delisting order directly (without having to first request the OJK’s order) for any public company which shares have been suspended for 24 consecutive months due to failure to comply with listing requirements. To provide further context, as of January 27, 2025, the supervision board of the IDX had 365 public companies under its oversight, and 44 of them faced the risk of delisting.
(c) Timeframe to commence IDX- and OJK-forced delisting. OJK Regulation 45/2024 requires a public company to announce the GMS agenda on the change of status from public company to private company within 30 days from the date of effectiveness of the IDX’s delisting order or the OJK’s go-private order respectively.
Footnotes
1. Pursuant to limb (a) of the definition of “Controller,” a controller is a party that directly or indirectly owns more than 50% of the total paid-up capital of a public company.
