4 October, 2013
Navigating the regulatory landscape in Indonesia can be tricky but publicly listed foreign investment companies can get help to steer a straight course.
Indonesia saw 23 new publicly listed companies in 2012, a sign of the vitality of the country’s capital markets even as the global economy struggled as a result of the financial crisis in Europe and the United States. But the continued growth of the Indonesian capital markets will require the support of a sufficient supply of qualified human resources.
To meet this need many corporate law firms and/or corporate lawyers are beginning to offer corporate secretarial services to publicly listed foreign investment companies in Indonesia. In a nutshell, a corporate secretary is there to ensure a company complies with relevant laws and regulations, and keeps the Board of Directors informed of its legal responsibilities.
Bapepam-LK and now the Financial Services Authority (Otoritas Jasa Keuangan, or “OJK”) have since 1996 regulated the duties and responsibilities of corporate secretaries in Indonesia. Those duties and responsibilities are as follows:
- Keeping abreast of developments in the capital markets, particularly the prevailing regulations of the capital markets;
- Providing services to the public with regard to all the information needed by investors in connection with the condition of the Issuer or Public Company;
- Giving input to the Board of Directors of the Issuer or Public Company to comply with the provisions of Law No. 8 of 1995 concerning the Capital Markets and its implementing regulations; and
- Acting as a contact person between the Issuer or Public Company and the OJK and the public.
It all sounds pretty straightforward but the uninitiated can struggle to grasp all that is involved in carrying out these duties and responsibilities.
Assuming that the company’s fiscal year runs from January to December, a corporate secretary must ensure that the following work is completed, on deadline, from year to year:
| No. | Corporate Secretary Responsibilities | Deadline |
| 1. | Report to the Capital Investment Coordinating Board (“BKPM”) on investment activity | January 31 |
| 2. | Report to the Indonesia Stock Exchange (“IDX”) and OJK on the December 31 Financial Statement (including newspaper announcement) | March 31 |
| 3. | Report to the IDX on the March 31 Financial Statement | April 30 |
| 4. | Annual report to the IDX and OJK | April 30 |
| 5. | Report to the Ministry of Trade on the Annual Financial Statement | June 30 |
| 6. | Report to the IDX and OJK on the June 30 Financial Statement (including newspaper announcement) | July 31 |
| 7. | Report to the IDX on the September 30 Financial Statement | October 30 |
| 8. | Report to Bank Indonesia on the company’s foreign currency loans | Every 10th of the month |
| 9. | Preparation of General Meeting of Shareholders | Start with notification to the IDX and OJK at least 7 days before the announcement appears in newspaper |
| 10. | Public Expose | At least once a year, starting with notification to the IDX and OJK at least 10 days before the date of the public expose |
| 11. | Preparation of Board of Directors Meeting | |
| 12. | Preparation of Board of Commissioners Meeting | |
| 13. | Preparation of Audit Committee Meeting | |
| 14. | Liaise with government officials, IDX, OJK and stakeholders |
It is important to note that in 2012 the IDX handed down a total of 710 sanctions to Issuers for failing to comply with listing regulations. Those sanctions comprised 561 written warnings, 131 fines, and 18 suspensions.
That is why a committed and competent corporate secretary can play such an important role, keeping the Board of Directors informed of its legal responsibilities and ensuring the company complies with all the relevant laws and regulations.
For further information, please contact:
Indrawan Dwi Yuriutomo, Soewito Suhardiman Eddymurthy Kardono
[email protected]
Soewito Suhardiman Eddymurthy Kardono Corporate/M&A Practice Profile in Indonesia