Covid-19: Specific Considerations in Conducting Merger and Acquisition
Covid-19: Specific Considerations in Conducting Merger and Acquisition The Covid-19 pandemic outbreak has caused great uncertainty and disrupted business activities in Indonesia and even the rest of the world. The Government of Indonesia itself has taken a number of extraordinary measures to overcome the crisis, including by implementing a Large-Scale Social Restrictions (PSBB) policy, restrictions on foreigners traffic, travel restrictions specifically for returning to one’s hometown, temporary closure of workplaces and education, all of these policies resulted in considerable operational difficulties and disruptions for business operators. Under current conditions, mergers and acquisitions (M&A) become a corporate action that must be carefully considered. Investors must be careful in making decisions during this time of uncertainty. With which transaction risks will of course also increase. This article intends to convey certain steps that need to be considered by the parties in an M&A transaction. Due Diligence The current Covid-19 pandemic situation is very dynamic and continues to grow, which causes the need for a wider due diligence investigation to assess a company’s business vulnerability. It is…
Read More
COVID-19 and Employee Holiday Allowance Payment Postponement
COVID-19 and Employee Holiday Allowance Payment Postponement The COVID-19 pandemic extended to all sectors, including the business and production sectors. Business and production activities are disrupted, thus companies must perform mitigation efforts to avoid collapse. Strengthening capital and tightening expenditures must be done to maintain the sustainability of the company. One form of tightening is restructuring, which often results in salary reduction and even termination of employment. At this time Eid al-Fitr is getting closer. Generally, companies give Holiday Allowance on Eid, following the majority of employees. Under normal circumstances, the Holiday Allowance has been prepared by the company long before. However, with the COVID-19 pandemic and its impact, both because of restrictions by government regulations and adaptation efforts by companies that erode their financial reserves, the company may experience financial incapacity that affects its ability to provide Holiday Allowance. Holiday Allowance Payment Terms That Holiday Allowance is mandatory is undeniable. This is regulated under Republic of Indonesia Government Regulation (PP) Number 78 of 2015 regarding Wages; Regulation of the Minister of Manpower Republic…
Read More
Do not Store Used Machines That Contain Radioactive before Having This Permit
Do not Store Used Machines That Contain Radioactive before Having This Permit “Even though machines containing radioactivity are no longer used, to be able to store these machines requires permission from the Nuclear Energy Regulatory Agency (BAPETEN)” In the last 100 years nuclear is considered as a discovery that brings great benefits to humans but on the other hand is also considered as a frightening discovery. Surely, it’s still pertain our memories of how the damage caused by the atomic bomb that hit Hiroshima and Nagasaki 76 years ago. Therefore, the nuclear industry transformed into a high-regulated industry in its development. In rational, nuclear utilization certainly uses materials or machines that are sophisticated and complex. Thus naturally, even though the equipment, machinery and other components are made of strong and sophisticated materials, it still has a limited lifespan. Regarding the storage of objects containing radioactive substances, for example, used machines of nuclear installations that were previously used and in contact with radioactive substances. Are there permits for storing these machines even if they are…
Read More
Can Covid-19 Pandemic be Qualified as Force Majeure Although Not Specified in the Agreement?
Can Covid-19 Pandemic be Qualified as Force Majeure Although Not Specified in the Agreement? “Basically it is not only the COVID-19 pandemic which may be considered as a force majeure event, any current overnment policy that may cause one party unable to carry out its obligations can be qualified as a force majeure.” In a contractual relationship each party that enters to an Agreement is obliged to carry out all the provisions ontained in the Agreement. The parties must fulfill their obligations and able to obtain their rights set out in the Agreement. How about the current condition, in which the COVID-19 outbreak that devastated all social structures and especially business operation? As we all know, in the event of the COVID-19 outbreak, the Government implemented various policies ranging from the relaxation of medical equipment imports to the limitation of large-scale social interaction (“PSBB”). This phenomenon has hit business operators by rendering them unable to operate their business normally. In the context of agreement, what if the condition renders one party to unable to…
Read More
Covid-19: Immediately Review Your Credit Agreement and Financing Document
Covid-19: Immediately Review Your Credit Agreement and Financing Document The review is important in deciding what steps to be taken in the future in order to mitigate risks arising from the spread of Covid-19. The spread of the Covid-19 pandemic has greatly influenced financing projects in several industrial sectors. To minimize the negative impacts that arise, companies must know their financial capabilities based on current conditions and to understand the steps that must be taken in the future, a review of credit agreements and other financing documents is necessary. The objective of credit agreements and other financing documents review is to determine the extent to which the Covid-19 pandemic affects the obligations of debtors, creditors and guarantors both in the short term and in the long term. The Indonesian government itself has issued several regulations to maintain the economic and financial stability of businesses in Indonesia. For example, the Financial Services Authority (OJK) policy to provide economic stimulus so that banks will be able to maintain the quality of assets and the ratio of…
Read More
Abandoned Land, What are the Legal Consequences?
Abandoned Land, What are the Legal Consequences? “In the event of a land is determined as abandoned land, then the legal right to the land and the change in ownership status will be submitted to the state, therefore the aforementioned will be under the control and/or ownership by the state.” Land must be beneficial for the community, unfortunately many land rights holders do not properly use their rights. Eventually the land became abandoned. When the land was considered to be an abandoned land, the State will take over the land. The provision of land acquisition by the State is stipulated in Government Regulation Number 11 of 2010 regarding Issuance and Utilization of Abandoned Land (“PP No. 11/2010”). In addition, there is also the Regulation of the Head of the National Land Agency 9 of 2011 regarding Amendments to the Regulation of the Head of the National Land Agency Number 4 of 2010 regarding Procedures for Abandoned Land (“Perka BPN No. 4 of 2010 in conjuction with Perka BPN No. 9 of 2011”). Definition of…
Read More
Can Company Cut Employess Wages Due To COVID-19?
Can Company Cut Employess Wages Due To COVID-19? Employees wages must be paid in full. However, the company can enter into agreement with the employees to delay or reschedule the payment. The coronavirus outbreak, which has spread to more than 110 countries with more than 118,000 cases, has made Coronavirus Disease 2019 or COVID-19, a disease caused by a SARS-like virus, a pandemic. That is, this disease has spread widely and systematically globally, in almost all countries in the world, one of which is Indonesia. Until this news was revealed, there have been 514 positive cases of the coronavirus in Indonesia, spread in 20 provinces. The most cases until now are the Province of DKI Jakarta. Various government agencies have issued appeals regarding COVID-19, one of which is the Ministry of Manpower. On March 17, 2020, the Minister of Manpower of the Republic of Indonesia, Ida Fauziyah, issued a Circular of the Minister of Manpower of the Republic of Indonesia Number M/3/HK.04/III/2020 concerning Worker/Labor Protection and Business Continuity in the Context of Prevention and…
Read More
An Investment in Indonesia: Benefits Given by the Government
An Investment in Indonesia: Benefits Given by the Government An investment is a form of business to get profit in the future, or specifically in Indonesia, an investment or more known by a capital investment, as regulated under Law No. 25/2007 about Capital Investment, is all form of capital investments by local investor or foreign investor to conduct business in Indonesia. More specific in the same regulation, it states that a foreign capital investment is an activity of investing to conduct business in Indonesia using either fully foreign capital or joint-capital with local investor. In Law No. 25/2007, it also states that the investor could get general benefits such as: The investor is given two years of limited stay permit The limited stay permit could be changed into a permanent stay permit if the investor has lived in Indonesia for consecutive 2 years Re-entry permit for several trips for the holder of limited stay permit and with a validity period of one year for a maximum period of 12 months from the date a…
Read More
LIST OF SPECIAL ECONOMIC ZONES IN INDONESIA
LIST OF SPECIAL ECONOMIC ZONES IN INDONESIA Special Economic Zones are areas within certain boundaries that have geo-economic and geo-strategic advantages which located inside of a country. Special Economic Zone first appeared in the late 1950s in Shannon Airport in Claire, Ireland. One of the main purposes of Special Economic Zone is to attract investors by giving tax incentives and lower tariffs for conducting business in Special Economic Zone. China is the perfect example of successful country in using Special Economic Zones to attract investors of foreign capital. China has even declared an entire province, Hainan, to be a Special Economic Zone. The first four Chinese Special Economic Zones were all based in south-eastern coastal China and included Shenzhen, Zhuhai, Shantou, and Xiamen. China allowed, and continues to allow, these areas to offer tax incentives for foreign investors and develop their infrastructure without approval. The Special Economic Zones essentially act as liberal economic environment that promotes innovation and advancement within China’s borders. The Special Economic Zones continue to exist with great success. The success of Shenzhen and the other…
Read More