Nov

24

IPO for Companies Involved in Legal Cases

Every company has the opportunity to conduct an initial public offering (IPO) and list its securities on the Indonesia Stock Exchange (IDX). In the context of an IPO, the company will issue a document called a prospectus, which is a document that contains any written information related to the public offering process that the company is carrying out with the aim to disclose everything about the company to the public before they decide to buy securities. The form and content of the prospectus in the context of a public offering have been regulated in the Financial Services Authority (OJK) regulations.

In the prospectus, the company is required to publish detailed information or material facts regarding the public offering and data or information that may influence the investors’ decisions. The prospectus is prohibited from containing untrue information about material facts so that it does not provide a misleading picture. Important and relevant information is disclosed in the prospectus, including legal opinions by legal consultants registered with the OJK, such as disclosure of important and relevant cases, civil or criminal claims, as well as other legal actions concerning issuers and subsidiaries, members of the board of directors or members of the board commissioner (if any).

Legal issues in a company are quite diverse, they will be given a legal opinion by a legal consultant who is authorized to provide it. The prospectus is part of implementing good corporate governance for companies raising funds through the capital market. Given the importance of the prospectus, investors who want to buy securities must read the prospectus issued by the company.

Currently, the stock IPO process has been carried out through the Electronic Indonesia Public Offering system. Companies that are in the process of a public offering of shares and have obtained publication permission from the OJK, can find this information on the e-IPO website. The company must upload the initial prospectus, summary prospectus and final prospectus. Investors who place orders through the e-IPO system shall also have read the prospectus. This is intended so that investors can study and consider all aspects of the company before buying the securities issued by the company.

If the company is already in the pipeline and is then subject to legal action, the IDX may request an explanation first, including a description of the impact, the company’s efforts to resolve it and other relevant information, including requesting an explanation from a legal consultant. To protect investors, the IDX may ask the prospective listed company to disclose important or material information that may affect the company’s business continuity or investors’ decisions in the prospectus. In the event that the problem has an impact that can disrupt the company’s operations or business continuity, the stock exchange may ask the company to postpone the IPO and resolve the matter first.

Should you wish to carry out these legal services with the help of our expert capital market lawyer, please drop us an email at info@schinderlawfirm.com.

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