The filing made by Altimeter Growth Corp., the special purpose acquisition company Grab will merge with for its United States listing, disclosed some interesting information. This includes the proposed share ownership and voting structure post-IPO, pursuant to which Grab’s founders will hold “Class B” shares amounting to only 3.3 percent of the total shares but are entitled to 60.4 percent of the voting rights.

The differentiation of share classes allows the weighted voting rights structure to be adopted by this Singapore-based company and ensure its founders hold the majority voting rights despite share dilution.

The adoption of share classes is common in private companies in Indonesia. Many of them have share classes in their capital structure to allow for preferential treatment, including voting rights, for certain shareholders.

The conventional arrangement of one share one vote is no longer deemed suitable for companies in rapidly changing industries that demand quick decision-making processes. It is gradually being replaced with an arrangement of weighted voting rights, pursuant to which one share can have more than one vote.

Despite being a prevalent practice for private companies, it is peculiar to see Indonesian public companies with share classes in their capital structure. To date, Indonesia Stock Exchange (IDX) only accommodates the adoption of share classes for publicly listed state-owned companies (SOEs) by allowing the Indonesian government to hold dwiwarna (two-colored) shares in those SOEs.

The dwiwarna shares carry certain privileges and veto rights on essential aspects of the companies, such as amendment of articles of association and appointment of members to the board of directors, to enable the government to retain its control.

Reportedly, some Indonesian technology companies will follow Grab’s footsteps in going public.

Our home-grown technology companies need support from the IDX to accommodate their unique business structures, including to allow the voices of the founders to remain be heard despite their small shareholdings.

Now is the time for the IDX to expand the adoption of share classes to non-SOE, so that national technology companies can continue to thrive when they morph into public companies.

Why do the founders deserve the privileges?

A strong leadership is one of the key ingredients that form the company’s success. The founders have led start-up companies into giant technology companies that have transformed the Indonesian business landscape. While these founders have leverage in the form of skills and leadership, they do not have the economic power to match the capital contribution of investors.

As the companies grow and require more capital injections, the founders’ shareholdings will eventually be diluted. That’s the major risk these companies have to face before going public – they will get more capital they need the most to develop their businesses but at the cost of the leadership power of their founders.

If there is no change to the current regulatory and policy framework for public companies, the control of these companies will shift to the investors who inject the highest amount of capital.

What is “fair” in this case? Should more voices be given to those that give more money at the later stage or to the persons whose hard work has helped the companies thrive from zero?

Grab is not the only example of the dual share-class structure for public companies. From Google to Facebook, the number of public companies that have adopted this structure is growing. This goes hand in hand with the number of stock exchanges that accommodate share classes for public companies. In the region, Hong Kong Stock Exchange and Singapore Stock Exchange have allowed share classes for public companies since 2018.

It is understandable if the IDX needs time to assess this new development carefully. The IDX has a primary obligation to help the public buy shares of listed companies and afford the listed companies access to public funds. Therefore, they want to ensure that the public has sufficient information and protection before deciding on any investment.

One of the concerns raised amid the implementation of a dual share-class structure for public companies is that it gives trust to the founders to retain the control and the same trust can be abused by the founders and will result in the companies’ downfall. The public investment in these companies would be affected as well, and there would be a further systemic impact on the national economy.

This is a valid concern, but it can be managed with proper regulations. The information on share classes should be disclosed to the public so they can assess the investment risks. Within the companies, there should be safeguards to protect other shareholders from potential abuse of power by the founders: certain limitation on key matters should be introduced; proper corporate governance should be strictly enforced; and event-based sunset clauses for the founders should be put in place, so that such privileges will expire at certain events (e.g. when a holder dies or is incapacitated for performing his/her duties).

A balance between growth and governance is not impossible. One share one vote, equal treatment for all shareholders, sounds noble, but it is not the fair case for Indonesian technology companies that are planning to go public.

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The writer is a corporate and merger and acquisition lawyer. The views expressed are her own.