At the end of last year, Indonesia's Financial Services Authority ("OJK") issued OJK Regulation No. 22/POJK.04/2021 ("Regulation 22") on multiple voting rights shares. Regulation 22 allows issuers deemed as having innovation and a high growth rate, specifically technology start-ups that intend to go public, to implement multiple voting rights shares.
In Regulation 22, OJK sets out the requirements to implement multiple voting rights shares, the obligations imposed on shareholders holding multiple voting rights shares, and the requirements that apply if the relevant issuer intends to conduct certain corporate actions.
Most recently, the Board of Directors of the Indonesia Stock Exchange issued Decree No. Kep-00014/BEI/03-2022 ("Decree") to complement Regulation 22 and the new listing regulation (Regulation I-A Kep-00101/BEI/12-2021), which was also issued in 2021. The Decree eliminates the gap between Regulation 22 and the new listing regulation. Additionally, it stipulates that in a public company with multiple voting rights shares, shares in scrip form may be counted as free float shares if the escrow account to hold such scrip shares is not ready before the start of the lock-up period. The Decree also states that scrip shares must also fulfil the other criteria for free float shares as set out in the new listing regulation to be considered as free float shares.
