On 1 December 2021, the Financial Services Authority (Otoritas Jasa Keuangan or OJK) issued the long-anticipated regulation governing the implementation of classes of multiple voting rights share (“MVS“) under OJK Regulation No. 22/POJK.04/2021 (“Regulation“).
As the title of the Regulation suggests, MVS can only be implemented by issuers deemed as having innovation and high growth rate, specifically technology start-ups that intend to do an initial public offering (“IPO“) in Indonesia. Usually, there are concerns among start-up founders when conducting an IPO because of the potential dilutive effect on the founder’s ownership in the company, which in turn diminishes the founder’s ability to retain control of the company. By issuing the Regulation, the OJK signals to start-up founders that they can protect their vision after IPO. Concurrently, the Regulation also gives certainty to the public on who holds control over the company.
As we discuss in the Update, the Regulation sets out the requirements for the implementation of the MVS, obligations imposed on the MVS holders, and specific requirements for the MVS issuer in implementing corporate actions such as private placement and rights issue.
For more information, click here to read the full Legal Update.
