1. MATERIAL
TRANSACTIONS AND
CHANGES OF MAIN
BUSINESS LINE
HEAD OF BAPEPAM-LK REGULATION NO. IX.E.2
By: Alfa Dewi Setiawati and Gabriella Ticoalu

2. LEGAL BASIS
• Law No. 8 of 1995 on Capital Market Law
• BAPEPAM-LK Regulation IX.E.2 of 2011
• BAPEPAM-LK Regulation IX.E.2 of 2009
• BAPEPAM-LK Regulation IX.H.1
• BAPEPAM-LK Regulation IX.E.1
• BAPEPAM-LK Regulation X.K.1
• BAPEPAM-LK Regulation IX.J.1

3. KEY ISSUES
• Why Regulate Material Transactions
• Definitions
• Key Changes between the 2009 and 2011 Regulation No. IX.E.2
• Common Provisions
• Disclosure of Information
• Material Transactions with Affiliations
• Material Transactions
• Definition
• Classification
• Object
• Time Framework Requirements
• Determination of Price in for Shares as Object of Material
Transactions
• Exceptions
• Changes of Main Business Line

4. WHY REGULATE MATERIAL
TRANSACTIONS?
• To ease Public Company to obtain financing in order to
enhance business progress
• Effect to financial performance of Public Company
• Rights of Public Shareholders to be informed

5. DEFINITIONS
• The “Company”
Issuers who have conducted ​a Public Offering of Equity
Securities or Public Company
• “Controlled Company”
A company controlled, directly or indirectly, by the Company
• “Main Business Line”
Business activities as listed in the articles of association of the
Company and has been running by the Company

6. KEY CHANGES
• Additional provision regarding bond issuance which has value
of more than 50% of Public Company’s equity in which the
buyers have not already been known
• Revision and one new provision regarding exemptions on
obligation of disclosure of information as well as the
guarantee for Material Transactions of receiving loan from
financial institutions
• New provision regarding Changes of Main Business Line
conducted by subsidiary company
• Revision on the timeframe requirement for notification after
the Material Transaction

7. DISCLOSURE OF INFORMATION
• Description of the Transactions
• Explanation, Consideration, and Reason of Transaction
• Summary of Appraisal Report
• Statement from BOD and BOC stating that all information has
been disclosed and are not misleading
• Contactable domicile and address to obtain information on
the Material Transactions

8. AFFILIATED TRANSACTIONS
Additional information that shall be disclosed:
• the affiliate relationship and the nature of the relationship
with the Company; and
• Explanation, consideration and reason of the affiliated
transaction and comparison with the same transaction with
unaffiliated.

9. MATERIAL TRANSACTIONS
• Placement in business entity, projects and/or certain business;
• Purchase, sales, transfer, exchange, of assets or business
segments;
• Lease of assets;
• Borrow and lend of money;
• Provision of assets as collateral; and/or
• Provision of corporate guarantee;
With value of 20% (twenty percent) or more than the equity of
the Company, through a single or series of transaction for a
certain purpose or activity.

10. MATERIAL TRANSACTIONS
(contd.)
• 20% - 50%
• >= 50%
• >= 50% through Bonds
• >= 50% through Acquisition
• Material Transactions through Tender

11. OBJECTS OF MATERIAL
TRANSACTION
• Shares
• Assets other than shares
• Business segments
• Lend or borrowed money
• Secured assets
• Corporate guarantee

12. TIME FRAMEWORK
REQUIREMENT
• Material Transaction shall be executed within the period of 12
(twelve) months after the GMS approval

13. DETERMINATION OF PRICE
In the event the object of Material Transaction is public
company’s shares:
For unlisted and untraded shares:
• In terms of selling, the value of the shares shall be at least the
reasonable market price or more than the reasonable market
price determined by the appraisal, which one is the higher; or
• In terms of buying, the value of the shares shall be the
reasonable market price at the most or less than the
reasonable market price determined by the appraisal, which
one is the lower.

14. DETERMINATION OF PRICE
(contd.)
For listed and traded shares, but not traded within 90 days
before the Material Transaction:
• In terms of selling, the value of the shares shall be at least the
reasonable market price or more than the reasonable market
price determined by the appraisal or at least the average price
of the closing price of the daily trade at the stock exchange as
of 12 months before the last trading day, which one is the
higher; or
• In terms of buying, the value of the shares shall be the
reasonable market price at the most or less than the
reasonable market price determined by the appraisal or more
than the average price of the closing price of the daily trade at
the stock exchange as of 12 months before the last trading
day, which one is the lower.

15. DETERMINATION OF PRICE
(contd.)
For listed and traded shares:
• In terms of selling, the value of the shares shall be at least the
average price of the higher price of the daily trade at the stock
exchange for the last 90 days before:
- material transaction date; or
- GMS announcement date.
• In terms of buying, the value of the shares shall be maximum
of the average of the highest price from the daily trade at the
stock exchange for the last 90 days before:
- material transaction date; or
- GMS announcement date.

16. EXCEPTIONS
1. Material Transaction with Controlled Company;
2. Corporate guarantee over transaction made by Controlled
Company with minimum ownership of 99%;
3. Loan from either domestic or foreign bank, venture capital
company, financing company, or infrastructure financing
company;
4. Guarantee for either domestic or foreign bank, venture
capital company, financing company, or infrastructure
financing company over loan obtained by the public
company or the Controlled Company;
5. Material transaction as the main business activity;

17. EXCEPTIONS (contd.)
6. A material transaction conducted by the public company with
respect to assets that are:
i. directly used for the production process or the main business
activity of the public company; and/or
ii. used to directly support the production process or the main
business activity of the public company;
7. Issuance of securities other than equity securities, through a
public offering;
8. Material transactions which has fulfilled the necessary
requirements and information which has been disclosed in the
prospectus;
9. An increase or decrease of capital participation by the public
company to maintain percentage of its shares in other companies,
provided that the terms of the capital participation is at least one
year;

18. EXCEPTIONS (contd.)
10. Material Transaction by a bank which have obtained loan
from Bank Indonesia or other government institution in the
amount of more than 100% of paid-up capital or other
conditions which may cause the bank to be restructured by
the authorized governmental institution;
11. Material Transaction conducted by public companies other
than bank which have had a negative balance of its working
capital and negative equity;
12. Direct release or acquisition of assets as results of court
decision/stipulation; and or
13. Material Transaction for fulfilling obligations set out in the
laws and regulations.

19. CHANGE OF MAIN BUSINESS LINE
• Requires a prior approval from the GMS
• The agenda of the GMS shall include a special agenda on the
feasibility study of the change of main business line of the company
• The prior approval from the GMS is not required for the change of
main business line that decreasing the main business lines of the
company with certain conditions which are as follows:
1) The main business line experienced losses 3 years in a row
based on the annual financial statement;
2) Decreasing of the main business line will not affect the business
operation of the company; and
3) Announce to the public and report to Bapepam-LK within the
period of 2 days after the decision to change the main business
line.

20. CHANGE OF MAIN BUSINESS LINE
(contd.)
• In the event the Change of Main Business Line conducted by:
a. A non-public Controlled Company whose financial statement is
consolidated with a public company, then the public company
must conduct the procedures stipulated in this regulation;
b. A public Controlled Company whose financial statement is
consolidated with a public company, then only the Controlled
Company must conduct the procedures stipulated in this
regulation in the extent that the revenues of the Controlled
Company contributes 20% or more of the revenues of the public
company based on:
1) Consolidated annual financial statement of the public
company; or
2) Proforma consolidated financial information of the public
company which has been reviewed by accountant if the
financial statement of the Controlled Company has not been
consolidated in the annual financial statement of the public
company.

21. THANK YOU