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ublicly listed firms are questioning the contents of a new regulation issued by the Indonesia Stock Exchange (IDX), specifically those concerning a company'€™s board of commissioners (BoC) and board of directors (BoD).

In a presentation on Monday, the regulation'€™s section on independent commissioners and independent directors garnered the most responses from firms that said the new rule might affect their rights as it determined the length of time that an independent commissioner or director could stay in their post.

According to the regulation, which will become effective next Thursday, an independent commissioner and independent director '€” also commonly known as a '€œnon-affiliated'€ commissioner or director '€” can only retain their positions for two consecutive terms in office. Periods of tenure vary from company to company.

The IDX said the regulation aimed to prevent executives from losing their independence and objectivity if they were with one firm for too long.

'€œFirms can still employ the same executives after they have served two periods, but they have to remove the independent tag. Then they are required to find new people for the [independent] positions,'€ said IDX corporate listings director Hoesen.

However, Henry Chevalier, corporate secretary of hotel chain PT Hotel Mandarine Regency (HOME), argued that the IDX was stepping too far into companies'€™ internal affairs. '€œSo what if they serve for a long time? It'€™s not a problem as long as they work well,'€ he said.

Representatives from PT Bank Danamon and PT Bank Central Asia said that necessary adjustments would take longer than six months '€” the transition period set by the IDX '€” as the lenders would have to acquire approval from the Financial Services Authority (OJK) for any changes to the BoC and BoD.

Meanwhile, commenting on the '€œfree-float'€ requirement for existing publicly listed firms, tobacco company PT HM Sampoerna'€™s head of regulatory, international trade and communications, Elvira Lianita, said in an email that it would await further information before making any decisions.

IDX data shows that the public controls only 2.05 percent of Sampoerna shares, equal to 89.93 million shares, while PT Philip Morris Indonesia holds the remaining 97.95 percent.

As of Monday, Sampoerna topped the list of '€œbig cap'€ companies, with market capitalization of Rp 297 trillion (US$24.27 billion).

According to the free-float requirement, public companies must release at least 7.5 percent and 50 million of their shares to the public. This will drive firms like Sampoerna and lender PT CIMB Niaga to increase their public share ownership within a 24-month period.

CIMB Niaga corporate secretary Rudy Hutagalung said the bank would take action before the deadline. Malaysia'€™s CIMB Group Sdn. Bhd. has majority ownership within the bank with 96.92 percent, while the public controls 3.08 percent.

'€” JP/Tassia Sipahutar