LIPPO-MAPLETREE - Lippo Malls Indonesia Retail Trust - Investor ...

Overview of relevant laws and regulations in IndonesiaFurther, pursuant to Regional Regulation of DKI Jakarta Province No. 2 of 2002, dated 28 June 2002regarding Private Markets in DKI Jakarta Province, every operation of a private market must obtain writtenapproval from the Governor of DKI Jakarta. Private markets includes stores, malls, supermalls, plazas andshopping centres. The private market operational licence is valid as long as the company still engages inthe private market activities, provided that the registration must be conducted once every five years. Theprivate market activities must include the partnership formation of a cooperation of small scale enterprisesor cooperatives, paying tax and retribution obligations, and informing the DKI Jakarta Governor in writing ifthe private market activities are no longer conducted or are transferred to other parties.Any individual or company that engages in private market activities without obtaining the licence will besentenced to imprisonment for a maximum of three months, or will be fined a maximum of Rp. 5,000,000and or will receive administrative sanctions such as the temporary closing of the private market location.REGULATION ON TRANSFER OF SHARESOn 16 August 2007, the Indonesian government enacted Law No. 40 of 2007 on Limited Liability Company(the “New Company Law”). Based on the New Company Law, there are two approaches on the transfer ofshares, i.e., a transfer of shares and acquisition.Transfer of SharesA transfer of shares is conducted by way of executing a deed of transfer of shares. A copy of the deed oftransfer of shares must be provided to the company. After the execution of the deed of transfer of shares,the Board of Directors of the company must register every transfer of shares (including the date of transfer)in the shareholders’ register and special register, and must notify any changes regarding the shareholdersto the Minister of Law and Human Rights (“MOLHR”) to be recorded in the Company Registry within30 days after the date of the registration of the transfer of shares.The New Company Law stipulates that if the Board of Directors does not notify the MOLHR of such transferof shares, the MOLHR may reject the subsequent approval or notification which will be submitted to theMOLHR based on the shareholding composition and the name of the new shareholders. In practice, thenotification on the transfer of shares will be conducted by a notary through an online system. The MOLHRwill issue a receipt of notification once the MOLHR receives such notice.In addition, transfers of shares in public companies are subject to laws and regulations applicable to publiccompanies.Acquisition:An acquisition is defined as a share acquisition which results in a change of control in the company. TheNew Company Law differentiates the acquisition through the Board of Directors of the target company ordirectly through the shareholders.If the acquisition will be conducted through the Board of Directors, the Board of Directors of the targetcompany and the acquiring company must prepare an acquisition plan, which should contain at least thefollowing information:(a) name and domicile of the target company and the acquiring company;(b) reasons and explanations from the Board of Directors of the target company and the acquiringcompany;(c) financial statements (comprising at least the balance sheet in the preceding financial yearconsolidated with the balance sheet in the previous financial year, profit and loss statement fromthe relevant financial year, cash flow statement, and equity movement report including notes on thefinancial statements) of each the acquiring company and the target company;(d) procedures for valuation and conversion of shares of the target company to the shares to be sold inexchange for the sale of shares, if the payment is made by way of exchange of shares;(e) number of shares to be acquired;(f) source of funding;247