09 Feb 2016

A new regulation on rights issue was passed in December of last year by the Financial Services Authority (Otoritas Jasa Keuangan or “OJK”) under number 32/POJK.04/2015 regarding Increase of Capital with Pre-emptive Rights (“Regulation 32/2015”).

Regulation 32/2015 is promulgated by way of and attached to Decision of the Chairman of Bapepam-LK No. Kep-26/PM/2003 on Pre-emptive Rights. It replaces and revokes Bapepam-LK Rule No. IX.D.1 ("Previous Regulation").

We highlight the following significant changes brought by Regulation 32/2015:


  1. Unlike its predecessor, Regulation 32/2015 requires the approval of the company’s general meeting of shareholders (“GMS”) for
    an intended rights issue, before the submission of the registration statement to OJK;
  2. The required effective statement of the rights issue from OJK must have been obtained at the latest 12 months as of the date of the GMS approval;
  3. Non-cash capital injection is now acknowledged, provided that:
    a) the non-cash injection is directly related to the utilization plan of the rights issue proceeds; and
    b) the fair price of the non-cash injection is determined by an appraiser, and the period between the appraisal date and implementation date of the non-capital injection does not exceed 6 months;
  4. The rights issue newspaper announcement as regulated by the Previous Regulation is no longer in effect. Under Regulation 32/2015, the company can choose to announce it either in a newspaper or in the IDX website in addition to the required announcement in the company’s website;
  5. A time limit of 10 working days is imposed on the company for the fulfillment of OJK’s further requirements as conveyed in OJK’s response regarding the company’s registration statement documents. The company’s failure to comply with the time limit will result in the invalidation of the registration statement, and the requirement to re-submit it;
  6. Unlike its predecessor, Regulation 32/2015 requires the principal shareholder to provide a statement of whether or not it will exercise its rights;


From the above, it is clear that Regulation 32/2015 is intended to provide investors with more flexibility and ease in conducting a rights issue. (by: Elsie F. Hakim & Novario A. Hutagalung)