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Indonesia now allows multi-vote shares to spur tech IPOs
The Financial Services Authority (OJK) now allows multiple voting shares (MVS), but that alone is not sufficient to get more start-ups to list in Indonesia, experts say.
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The Financial Services Authority (OJK) logo is seen at the agency's headquarters in Jakarta. (kontan.co.id/File)
The Financial Services Authority (OJK) has issued a regulation that allows multiple voting shares (MVS) for technology companies.
The move is aimed at attracting initial public offerings (IPOs) from start-ups, but a public willingness to invest in such firms is deemed crucial for getting companies to list on the Indonesia Stock Exchange (IDX).
MVS confer greater voting power on their owners than regular shares, hence allowing, for example, a start-up’s founders and early backers to retain control of a company even when holding minority stakes after an IPO.
“The new OJK regulation [POJK] is issued to boost the capital market by accommodating companies in the new economy to list on the IDX,” the OJK said in a statement on Tuesday, referring to POJK No. 22/2021.
The statement goes on to explain that the authority allows multiple voting shares to ensure that a company’s vision and mission will align with its founders’ ideas.
IDX development director Hasan Fawzi said earlier this year that granting the founders greater voting rights was necessary, because tech start-ups’ business development was highly dependent on founders’ ideas and innovativeness.
Concurring with that notion, OJK capital market regulation director Luthfy Zain Fuady said at a press briefing on Thursday: “These companies’ valuations are tied to these people. If these people leave, the value would [drop].”
