Indonesia; [1]
Rahmat Bastian
International Financial Law Review. London: Oct 2004. pg. 1
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Abstract (Document Summary)
In July 2004 the Jakarta Stock Exchange issued a decree that revisits the requirements
and procedures for delisting and relisting on the stock exchange. Certain provisions
under a decree of the JSX board of directors made in 2000 were declared invalid.
Full Text (638 words)
Copyright Euromoney Institutional Investor PLC Oct 2004
Delisting and relisting revisited BT PARTNERSHIP, Jakarta
In July 2004 the Jakarta Stock Exchange (JSX) issued a decree that revisits the
requirements and procedures for delisting and relisting on the stock exchange. Certain
provisions under a decree of the JSX board of directors made in 2000 were declared
invalid.
Generally, the JSX retains the authority to decide on delisting and relisting, and decides
whether the relisting may place the shares on the main or the development board, for
any securities listed on its board, after considering the opinion given by the Securities
Listing Committee on the cause of the delisting and substantive requirements. The
decree explicitly advises that, if a listed company is facing delisting, then all securities
issued by the listed company must also be delisted from the list of securities, which
eventually would include its warrants or derivatives. Securities, according to the Capital
Market Law, include bonds or other debt instruments issued by the listed company.
Since the decree only concerns stock listings, so further clarification from the authority is
needed on why it refers to securities as well.
Delisting
Shares can be delisted by: (a) voluntary submission by the listed company; or (b) a
decision rendered by the JSX after certain conditions are met (that is, that the listed
company suffer one of two conditions as set out under the decree without chance of
potential or sufficient recovery).
Voluntary submission must be made by submitting a delisting plan to the JSX, followed
by disclosure of preliminary information to the public. Disclosure is made simultaneously
with the invitation to a general meeting of shareholders (GMS). This information must
contain at least: (i) the reason for and objective of the delisting; (ii) identification of any
parties willing to purchase the shares offered by the shareholder (if any); and (iii) an
estimation of the share value for the potential purchase. Voluntary submission can only
be granted if the shares have been registered for at least five years in JSX, the plan has
obtained the resolution of the listed company's GMS, and the listed company or other
appointed party fulfilled its statutory obligations to purchase the shares, at the stipulated
price (as defined below), from any shareholders who has objected to the resolution of
the GMS. The stipulated price for the purchase is the higher value of: (a) the nominal
price; or (b) the highest regular market price for the two years before the GMS
announcement, taking into account the adjustment factor due to the changes of the
nominal price added to premium (return on investment rate using the average of Bank
Indonesia Certificate interest rates as the calculation basis); or (c) the fair value of the
shares based on the valuation of an independent appraisal company registered in
Bapepam (Capital Market Supervisory Board) and approved by the GMS.
Relisting
A delisted company can submit a relisting application to JSX six months after the
delisting if: (a) it has recovered from the conditions that caused the company to delist;
(b) the board of directors and commissioners can state that the company has no existing
legal dispute nor is it facing any problem that might influence the continuation of the
company's business; (c) at least 30% of the company's board members are
independent; (d) the company has at least one non-affiliated (under certain categories
set out in the decree) member in the board of directors; (e) the company has an audit
committee; (f) the company has a corporate secretary; (g) the company's share price or
nominal value of its shares is at least Rp100 ($0.01), in compliance with certain
categories set out in the decree; and (h) the members of the board of directors and
commissioners have a good reputation. The JSX has also stipulated certain relisting
requirements for listing on the main board or the development board.