logo-ahplogo-ahplogo-ahplogo-ahp
  • Home
  • Firm
    • About Us
    • Careers
  • Solutions
      • Anticorruption & Good Corporate Governance
      • Banking & Finance
      • Capital Markets
      • Competition Law
      • Debt & Corporate Restructuring
      • Dispute Resolution
      • Energy, Oil & Gas
      • Foreign Direct Investment
      • Fraud & Forensics Investigation
      • Intellectual Property
      • Islamic Finance
      • Labor Law
      • Mergers & Acquisitions
      • Projects & Natural Resources
      • Real Property
      • Shipping & Aviation
      • Tax & Customs Services
      • Telecommunications & Media
  • Members
  • News & Insights
  • Rajah Tann Asia
✕
            No results See all results

            KPPU Imposes Record-Breaking Fines on Five-Years Old Transactions

            On 1 October 2019, the Indonesian Competition Commission, Komisi Pengawas Persaingan Usaha (KPPU) imposed a record-breaking fine of IDR20.66 billion (approx. USD1.46 million) on PT Citra Prima Sejati (CPS) for its failure to notify the KPPU of two transactions within the required timeframe. These transactions involved CPS’s acquisition of two Indonesian mining companies, PT Buana Minera Harvest and PT Mitra Bisnis Harvest, on 24 December 2013 (Transactions).

            The record-breaking sanction

            These fines arise in part as a result of the KPPU’s systematic review of previous transactions that had failed to be notified to the KPPU, as we previously reported (link). The Indonesian Merger Control Rules require companies to notify the KPPU of any mergers, consolidations, or acquisitions (Mergers) that meet certain criteria1 within 30 business days since the Mergers become legally effective. The KPPU decided that both CPS Transactions met these criteria, such that CPS ought to have notified the KPPU no later than 30 business days from 24 December 2013, or 7 February 2014. However, CPS only issued notification on 26 April 2019, 1,220 days (or 5 years, 2 months and 14 days) late. This was, to date, the longest period ever in which a company has failed to notify the KPPU of a Merger. The resulting sanction, IDR10.33 billion (approx. USD0.73 million) for each transaction – IDR 20.66 billion (approx. USD1.46 million) total – marks the highest fine ever issued for a failure to notify the KPPU of a Merger.

            Lack of clarity on the Statute of Limitations

            The KPPU’s website shows that 10 of 15 ongoing cases relate to late notification of past Mergers. The Indonesian Competition Law is silent on the statute of limitations, and these recent cases demonstrate that the KPPU will not hesitate to look back quite far and scrutinize transactions that occurred since the Indonesian Merger Control Rules came into force in 2010. Businesses must be cautious, as their past transactions from 2010 onwards that have not been notified to KPPU may carry the risk of KPPU fines.


            1. The criteria are that (i) the parties must not be affiliated with each other, (ii) the transaction results in change of control, (iii) transaction satisfies financial thresholds: combined group assets of IDR2.5 trillion [or IDR20 trillion for Mergers involving banks] or combined group sales of IDR5 trillion, and (iv) for foreign Mergers, the transaction has a direct competitive impact on the Indonesian market. If a Merger meets all these criteria, it must be notified to the KPPU.

            ***

            AHP Client Alert is a publication of Assegaf Hamzah & Partners. It brings an overview of selected Indonesian laws and regulations to the attention of clients but is not intended to be viewed or relied upon as legal advice. Clients should seek advice of qualified Indonesian legal practitioners with respect to the precise effect of the laws and regulations referred to in AHP Client Alert. Whilst care has been taken in the preparation of  AHP  Client Alert, no warranty is given as to the accuracy of the information it contains and no liability is accepted for any statement, opinion, error or omission.

            More Articles

            • IDX Enacts Regulation on Free Float for Companies with Multi-Voting Shares
              April 19, 2022
            • 0
              AHP advises GoTo in its IPO
              April 14, 2022
            • Back to Business as Usual as KPPU Reverts to the Original Notification Deadline and Reaffirms the Competition Compliance Program
              April 8, 2022
            • The Indonesian Government Mandates BPJS Membership to Buy Lands and Properties
              March 31, 2022
            • Ex Aequo et Bono: Applying Equity and Fairness under Indonesian Arbitration Law
              March 28, 2022
            • Shipping Law Update
              January 12, 2022
            • Multi-Voting Shares: Sweetener for Tech Start-Up IPOs?
              January 5, 2022
            • Committing to a Greener Future: Indonesia Embraces the Implementation of Carbon Economic Value
              January 3, 2022
            • OJK Embraces Digital Bank with New Regulations
              November 4, 2021
            • Brighter Days Ahead as Indonesia’s Ministry of Energy and Mineral Resources Revised Regulation on Rooftop Solar System
              October 7, 2021
            By Practice Area
            • Intellectual Property
            • Technology Media & Telecommunications
            • Projects & Energy
            • Banking & Finance
            • Real Property
            • Capital Markets
            • Competition
            • Mergers & Acquisitions
            • Dispute Resolution
            • Tax and Customs

            Jakarta Office

            Capital Place, Level 36 & 37
            Jalan Jenderal Gatot Subroto Kav. 18
            Jakarta 12710,
            Indonesia

            Phone: +62 21 2555 7800
            Fax: +62 21 2555 7899
            Email: info@ahp.id

            Surabaya Office

            Pakuwon Center, Superblok Tunjungan City
            Lantai 11, Unit 08
            Jalan Embong Malang No. 1, 3, 5,
            Surabaya 60261
            Indonesia

            Phone: +62 31 5116 4550
            Fax: +62 31 5116 4560

            Assegaf Hamzah & Partners


            © 2001 - 2022 Assegaf Hamzah & Partners. All rights reserved.

            Rajah & Tann Asia is a network of legal practices based in Asia.

            Member firms are independently constituted and regulated in accordance with relevant local legal requirements. Services provided by a member firm are governed by the terms of engagement between the member firm and the client.

            This website is solely intended to provide general information and does not provide any advice or create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on this website.