Exemption to Obligations for Majority Shareholders in Public Companies under the Tax-Amnesty Program

The Financial Service Authority (Otoritas Jasa Keuangan –“OJK”) recently issued Circular Letter No. 35/SEOJK.04/2016 on Mandatory Tender Offers as a Result of the Acquisition of Public Companies in Order to Support the Tax-Amnesty Law (“Circular”).In essence, the Circular sets out an exemption to the various obligations which are described under Art. 3a of the Appendix to Capital Market and Financial Institutions Supervisory Board (Badan Pengawas Pasar Modal dan Lembaga Keuangan) Decree No. KEP – 264/BL/2011 on the Acquisition of Public Companies (“Rule IX.H.1”). This exemption applies to any taxpayers who are being exposed as majority shareholders in public companies after disclosing their assets under the tax-amnesty program. [1] The 2016 Regulation is of relevance to any applicantsfor the tax amnesty-program who own shares in public companies, as well as to public companies and stakeholders who are engaging in the capital-market sector in general.Obligations of Majority Shareholders in Public CompaniesUnder the Rule IX.H.1 framework, an acquisition refers to any action that results in the changing of a majority shareholder in a public company, whether listed (issuer) or non-listed public company (perusahaan publik). [2] A majority shareholder itself refers to any party holding more than 50% of public company’s total shares, or which has the authority to determine company policy. [3] Rule IX.H.1 then mandates that any majority shareholders must comply with the following obligations: [4]