Change of Ownership P2P Company: What the Company Should Do?

The company that serves Information Technology Based Peer Peer Lending Services (P2P Companies) should obtain approval from the Financial Services Authority (Otoritas Jasa Keuangan/OJK) when they tend to change ownership. Furthermore, the plan should be mentioned in the Business Plan by the provision regarding the ownership aspect regulated in the Financial Services Authority Regulation Number 10/POJK.05/2022 concerning Information Technology-Based Peer-to-Peer Lending Services.

Regulations concerning corporate actions for P2P Companies are stipulated in Financial Services Authority Regulation Number 10/POJK.05/2022 concerning Information Technology-Based Peer-to-Peer Lending Services (“POJK 10/2022”). However, corporate actions in the form of acquisitions are not regulated in POJK 10/2022. POJK 10/2022 only regulates changes in ownership. Although both acquisitions and changes in ownership involve a transfer of ownership, the two cannot be equated. Acquisition refers to the process of taking over a company involving a transfer of control or majority ownership, while a change in share ownership occurs when shares held by a particular shareholder are sold or transferred to another shareholder, which may be a partial or complete change in share ownership and does not automatically imply a change in company control.

Approval from the Financial Services Authority (“Otoritas Jasa Keuangan/OJK”)

Article 68 paragraph (1) and (2) of POJK 10/2022 stipulate that changes in ownership of a P2P Company must obtain approval from the OJK if the change in ownership involves a change in:

1. Shareholders of the P2P Company who are not public companies;
2. Shareholders of shareholders of the P2P Company who are not public companies;
3. Controlling shareholders (Pemegang Saham Pengendali or “PSP”) of a P2P Company in the form of a public company; and
4. PSP of shareholders of a P2P Company in the form of a public company;

Furthermore, Article 68 paragraph (3) of POJK 10/2022 states that a P2P Company is prohibited from making changes in ownership that result in:

1. New shareholders; and
2. A change in PSP,

within a period of 3 (three) years from the date of the business permit as a P2P Company from the OJK.

Process of Change of Ownership of P2P Company

Considering Article 68 and 69 of POJK 10/2022 and the Company Law, the stages of a change in ownership of a P2P Company are as follows:

1. Developing a Business Plan

The plan for a change in ownership of a P2P Company must be included in the business plan as referred to in the POJK regarding the business plan of non-bank financial institutions with paying attention to Article 3 of POJK 10/2022.

2. Request for Approval from the Financial Services Authority (OJK)

A request for approval of a change in ownership in a P2P Company is submitted to the OJK using Form 12 as stated in the Appendix of POJK 10/2022, along with the following documents:

1. Draft minutes of the GMS approving the change in ownership:
2. Proposed ownership structure until the final ownership;
3. Copy of government regulations regarding state capital participation for changes in ownership of P2P Companies where the shareholder is the central government;
4. Copy of regional regulations regarding regional government capital participation for changes in ownership where the shareholder is the regional government;
5. Draft deed of transfer of shares or draft share purchase agreement;
6. Latest audited financial statements of the organizer and pro forma financial statements;
7. Photocopy of the tax return for the past two years and other documents showing the financial capacity and source of funds of the prospective individual shareholder:
   1. New shareholders of the P2P Company who are not public companies;
   2. New shareholders of the P2P Company who are shareholders of non-public companies;
   3. New PSP of a P2P Company in the form of a public company
   4. New PSP of a P2P Company in the form of a public company, as referred to in Article 68 paragraph (2) of POJK 10/2022, who are individuals;
8. Confirmation from the supervisory authority in the home country of the foreign party, if there is direct investment by a foreign legal entity that has a supervisory authority in its home country;
9. Debtor data from the financial information services system (SLIK) of the OJK of the prospective shareholder as a result of the change in ownership as referred to in Article 68 paragraph (2), or documents deemed equivalent by the OJK;
10. Data on members of the BoD and BoC as referred to in Article 9 paragraph (1) letter i and/or data on members of the Sharia Supervisory Board (Dewan Pengawas Syariah or “DPS”) if there is a change in the BoD, BoC, and/or DPS;
11. Certificate from the association for prospective shareholders;
12. Data of P2P Company shareholders;
    1. For individual shareholders, documents as referred to in Article 9 paragraph (1) letter d number 1 of POJK 10/2022; or
    2. For legal entities, documents as referred to in Article 9 paragraph (1) letter d number 2 of POJK 10/2022;
13. Proof of placement of funds in an Escrow Account and/or time deposit, if the change in ownership is made through a cash deposit; and
14. Proof of readiness of funds from the prospective shareholder, including:
    1. Copy of the deposit certificate or ownership of funds belonging to the prospective shareholder at the bank in accordance with the fair value stated in the draft deed and/or share purchase agreement;
    2. Proof of funds that have been disbursed to the P2P Company;
    3. Bank statements for the last 3 months.

3. Approval or Rejection of a Request

As stipulated in Article 69 paragraph (5) of POJK 10/2022, approval or rejection of a request for a change in ownership shall be made within a maximum period of 10 (ten) working days from the date of receipt of the change of ownership request documents in accordance with the requirements of this POJK.

In the event that a change in ownership results in a change of PSP, the OJK shall first conduct an assessment of the ability and fitness of the new prospective PSP as referred to in Article 19 of POJK 10/2022 before granting its approval.

Compliances After Change Ownership

Considering that a P2P Company is a Limited Liability Company, the provisions of the Company Law also apply to P2P Companies. Suppose a change of ownership has been conducted. In that case, a copy of the deed of the Company must be attached when submitting a notification or request approval to the Minister regarding amendments to the Articles of Association (“AoA”) follow the provision concerning the AoA amendment are stipulated in Law Number 40 of 2007 concerning Limited Liabilities Companies.

Author: Farisa Amiladinan

Gaffar & Co. is an Indonesian Boutique Law Firm specializing and focusing in Commercial Law, including Capital Market & Financial Services.

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