Credit Market In Indonesia

Credit market in Indonesia is dominated by the large commercial banks. The major commercial banks primarily focus their lending activity on top tier corporates in Indonesia and loan products are generally very basic – usually being collateral based loan products. Our focus is on credit support related, specifically.

(i) whether or not there is restriction for Indonesian incorporated company to provide credit support for the acquisition of its or its holding companies’ shares. Subject to the corporate benefit principle, in which the board of directors would need to act in the best interest of the company, there is no statutory prohibition on a company established in Indonesia from providing financial assistance in connection with the acquisition of its own shares or those of its parent company (either direct or ultimate). However, there are protection provisions for minority shareholders under the Indonesian Company Law and Capital Market Law. Under the Indonesian Company Law, any shareholder has the right to file a lawsuit against a company at the District Court whose jurisdiction covers the domicile of the company if the shareholder considers it has been harmed by the actions of the company unfairly and without reasonable grounds as a result of a…