New OJK Regulation on Capital Increase Aims to Provide Greater Protection for Minority Shareholders
In April 2019, the Financial Services Authority (Otoritas Jasa Keuangan or "OJK") issued a new regulation on capital increase with pre-emptive rights under No. 14/POJK.04/2019 ("New Regulation"). The New Regulation amends the previous OJK regulation on the same topic (No. 32/POJK.04/2015) ("POJK 32"), as well as repeals the OJK regulation on capital increase without pre-emptive rights (POJK 38/POJK.04/2014) ("POJK 38").
In the introduction of the New Regulation, the OJK states that one of the considerations in enacting the New Regulation is to increase the protection of minority shareholders, especially in relation to an increase of capital by a public company whether through pre-emptive rights or not. One of the mechanisms of this protection is to impose certain requirements on the convening of a general meeting of shareholders ("GMS"). Furthermore, the OJK also hopes to centralise the previous capital increase-related regulations into one regulation.