The Financial Institutions and Capital Market Supervisory Board (BAPEPAM-LK) has issued Decision No. KEP-413/BL/2009 (this decision has been in force since 25 November 2009) to improve an earlier decision, No. Kep-02/PM/2002 and the rule it contained, Rule No. IX.E.2 on Material Transactions and Changes to Principal Business Activities.
With the enactment of this Regulation, the Issuer and Public Company will obtain the easy way to perform their business activities. The perfection of the rule makes four basic changes to the previous provisions:
- Amends the provisions relating to what constitutes a material transaction. A material transaction is now any transaction with a value equals to 20% or more of the equity of the company;
- Amends the provisions relating to when a material transaction needs to obtain approval of the General Meeting of Shareholders. The obligation to obtain this approval arises when a material transaction with a value equals to 50% or more of the equity of the company;
- For material transactions between 20% and 50% of the equity of the company there is an obligation that the company provides transparent information regarding this transaction to Bapepam-LK;
- and Inserts additional provisions regarding share price in instances where the object of the material transaction are shares in the Issuer or Public Company.