Legal Alert

Updates on Financial Services

Authority (OJK) Policy on the
Implementation of e-GMS during
Covid-19 Outbreak
Since the issuance of large-scale social restriction
policies in Indonesia to quell the spread of the Covid-19
outbreak, public companies are increasingly
becoming subject to modifications for how general
meetings of shareholders (“GMS”) are to be conducted.
For instance, in a statement submitted by
Financial Services Authority (Otoritas Jasa Keuangan
or “OJK”) in March 2020, the issuance limit for the
annual GMS by the issuer was extended from
previously 30 June 2020 to 31 August 2020.
In conjunction with the foregoing, OJK has issued provisions that enable public companies to hold
a general meeting of shareholders electronically (“e-GMS”) in the midst of the spread of the Covid-19
pandemic. The policies set forth by OJK include regulations number 15/POJK.04/2020 (“POJK
15/2020”) and 16/POJK.04/2020 (“POJK 16/2020”), both of which came into force by 21 April 2020.

For this legal alert, we will only discuss the provisions on general requirements for conducting
e-GMS such as (i) terms for establishing the platform for e-GMS; (ii) guidelines to holding the e-GMS;
and (ii) alternative electronic mechanism for holding e-GMS. These provisions are recent updates
that are the most relevant in times of Covid-19, which shall be discussed in the ensuing paragraphs.

Terms for Establishing the Platform for e-GMS

POJK 16/2020 allows every publicly listed company registered in a public offering of security to
conduct e-GMS through teleconferencing media, video conferences or other electronic media
facilities.
e-GMS can be facilitated by the GMS Provider which in this case: (i) Depository and Settlement
Agency that appointed by OJK; or (ii) the other party which shall be an Indonesia Legal Entity and
domiciled in Indonesia, as agreed by OJK (“e-GMS Provider”).
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However, OJK also gives publicly listed company the option to develop their own e-GMS platform or
any third-party platforms. There are certain technical requirements that must be complied with for
the establishments of these platforms.

For any e-GMS Provider, be it the agency approved by OJK or the system provided by the public
company, registry to establish the platform should include features on:

a) code of conduct, GMS materials, and the required GMS meeting agenda
b) method for shareholders in deciding a resolution in each GMS meeting agenda;
c) mechanism to allow GMS participants to participate and interact in the GMS;
d) calculation of GMS attendance quorum;
e) collection and counting votes, including if there are more than 1 (one) classification of
shares;
f) records on all interactions in the GMS, either in audio, visual, audiovisual, or non-audiovisual;
g) electronic recordings; and
h) the granting of power of attorney electronically.

The e-GMS Provider shall draft its procedural terms for executing the e-GMS that is to be submitted
to OJK for a request of approval at the latest 6 months since POJK 15/2020 and POJK 16/2020 came
into force.
Guidelines to Holding the e-GMS
In holding the e-GMS, publicly listed company need to submit a notification of the meeting’s
agenda to OJK, conduct an announcement of GMS for shareholders and conduct a summoning for
shareholders.

The agenda of the e-GMS shall consist of (i) opening, (ii) determination of attendance quorums, (iii)
discussion of questions or opinions raised by shareholders that are to be submitted electronically
during each item agenda, (iv) determination of the decision of each agenda based on the decision
making forum, and (v) closing.

During the e-GMS, a physical meeting must be convened and attended by a minimum of one GMS
leader, one member of the board of directors and/ or one member of the board of commissioners,
and supporting profession members at the location where the GMS would usually be held.
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Presence of shareholders at an e-GMS by virtual means

can replace the physical presence of shareholders. It
quintessentially classifies as a fulfillment of the
attendance quorum. Under certain conditions, a
publicly listed company may not physically carry out a
GMS or limit the presence of physical shareholders
either partially or wholly in an e-GMS.

Following the completion of the e-GMS, a printed copy is to be submitted to the notary which
contains at least (i) List of shareholders present; (ii) List of shareholders with authorized electronic
authority; (iii) Summary of attendance quorum and decision quorum; and (iv) Transcript recording
all interactions in the GMS electronically to be attached to the minutes of the GMS minutes.

Minutes of the e-GMS must be made in the form of a notarial deed by a notary registered with OJK
without requiring the signatures of the GMS participants.

Otherwise, the deed can be executed under hand and is to be authentized by the notary at the
earliest convenience while utilizing electronic signatures (“e-Signature”) through certified
electronic signature provider designated by Ministry of Communication and Informatics.

eASY.KSEI as Alternative for Holding Electronic GMS

The Indonesian Central Securities Depository (Kustodian Sentral Efek Indonesia “KSEI”) Systems for
e-GMS is one utilization of an alternative electronic proxy for shareholders to attend and vote at the
GMS. Under the regulation Letter No.KSEI-4164/DIR/0420 (“KSEI Letter No. 4164”) dated April 3rd
2020 on the Enforcement of the KSEI Electronic General Meeting System, KSEI has provided a
system in order to facilitate the holding of the e-GMS (otherwise known as “eASY.KSEI”) which
consists of 2 (two) stages of implementation, namely E-Proxy and E-Voting. E-Proxy, is a system that
facilitates and integrates the power of attorney from the shareholders to the authorized recipients
electronically. E-Voting, is a system that facilitates the attendance and voting process of voting an
e-GMS to enable the shareholders to participate in the GMS without the need for physical presence.
In order to use eASY.KSEI, Public Companies are required to fill out and submit the form of power of
attorney/appointment of an authorized official (using the format provided in the Attachment 2 of
KSEI Letter No. 4164) to update the breakdown of the company procedures for implementing an
e-GMS.
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In summary, first, it is important to note that the implementation of the countercyclical policy shall
not disregard the application of prudence, risk management and good corporate governance
principles. Second, these e-GMS procedures, i.e. alternative virtual mechanism for holding e-GMS,
the KSEI Systems for e-GMS, as well as the terms for conducting the e-GMS demonstrate how it is
feasible to conform to good corporate governance even amidst Covid-19.

Author: Co-authors:

Farah Purwaningrum Yason Ferdinanta Michelle Abiah

Deputy Legal Manager Tarigan Co-counsel of Lawyerindo
of Lawyerindo Counsel of Lawyerindo