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THE ROLE OF PRINT MEDIA NEWSPAPERS IN THE DIGITAL ERA: AN EXAMINATION OF THE REQUIREMENT TO DECLARE ACTIONS UNDER LAW NUMBER 40 OF 2007 ON LIMITED LIABILITY COMPANY
Setyawati Fitrianggraeni, Tanya Widjaja Kusumah and Sri Purnama[1]
Keywords: Digital Era and Print Media, Legal Requirements for Limited Liability Companies in Indonesia, Law Number 40 of 2007 and Corporate Transparency, Declining Relevance of Newspaper Announcements, Corporate Announcements: Digital Adaptation in Corporate Reporting Future,
INTRODUCTION
Indonesia’s Law Number 40 of 2007 on Limited Liability Companies necessitates that these companies declare specific corporate actions via nationally circulated daily newspapers in Bahasa Indonesian. The stipulated corporate actions comprise investments share deposits in immovable objects, reduction of company capital, profit and loss financial balance, takeovers, mergers and/or acquisitions, and company dissolutions. This requirement is intended to enhance the transparency and accountability of companies to their shareholders and stakeholders. However, the effectiveness of this obligation requires evaluation, given that the public rarely purchases print media nowadays.
DECLINING RELEVANCE OF PRINT MEDIA
In 2017, Hellen Katherina, the Executive Director of Nielsen Media, explained that Nielsen surveyed 11 cities by interviewing 17,000 respondents. According to the results, print media – encompassing newspapers, magazines, and tabloids, presently have an 8% penetration rate and are read by 4.5 million people. Looking at the reader profile, print media in Indonesia tends to be consumed by consumers aged 20-49 years (74%), employed individuals (32%), and the majority of its readers come from the upper class (54%).” Evaluating the obligation to announce in newspapers may consider several areas for improvement.
THE OJK’S STANDPOINT
In an intriguing development, the Financial Services Authority (OJK) in Indonesia decided not to require issuers or public companies listed on the Indonesia Stock Exchange (IDX) to submit financial reports through national newspapers if they have uploaded these documents on the IDX’s official information disclosure website and the company’s official website, as stipulated in the OJK Regulation (POJK) Number 14 of 2022 regarding the Submission of Periodic Financial Reports by Issuers or Public Companies. The OJK also intends to reduce the costs required by issuers for each performance report and encourages public companies to utilize digital channels.
READERSHIP STATISTICS AND THE ADVANCING DIGITAL ERA
In 2019, the Central Bureau of Statistics conducted a survey indicating that the number of readers of newspaper/magazine media (both print and electronic) was at most 30%. Consequently, company announcements through newspapers are increasingly irrelevant in the advancing digital era. Print media is being abandoned, and society is shifting to online media. However, the advantages of newspaper announcements should also be noted.
THE LEGALITY OF NEWSPAPER ANNOUNCEMENTS
From a legal standpoint, announcements through print media newspapers can serve as valid evidence in legal proceedings compared to digital or online statements. Despite the recognition of electronic information and/or electronic documents as valid evidence and an extension of proof in the Procedural Law applicable in Indonesia, this is only the case if the electronic information and/or electronic documents use an electronic system following the provisions stipulated in Law No. 19 of 2016 regarding Amendments to Law No. 11 of 2008 on Information and Electronic Transactions.
STRENGTHS OF PRINT MEDIA
Announcements in print media newspapers are well-documented due to physical evidence and are printed in large quantities and circulated nationally. This makes print media newspaper announcements have strong and clear written evidence. Furthermore, print media are published regularly, daily, weekly, or monthly, with unique serial numbers in each edition. This makes newspaper advertisements easy to track and identify. Print media companies are bound by clear legal regulations, making it easier for the parties involved in the advertising process to understand and follow. This also makes announcements in print media newspapers more accountable.
CORPORATE ANNOUNCEMENT PRACTICES IN SINGAPORE
Compared with Singapore, there are no specific requirements under the law for private companies to disclose their acquisition or merger details to the public. However, suppose a private company is regulated by the Accounting and Corporate Regulatory Authority (ACRA)[2]. In that case, the Company is required to submit certain documents related to the acquisition, such as the share purchase agreement and acquisition details, to ACRA within 30 days of the acquisition. These documents will be available to the public after payment of a fee. Additionally, a loan to finance the acquisition or involves issuing new shares requires disclosure. In that case, the private company may be subject to certain disclosure requirements under the Companies Act in Singapore. For example, the company may be required to file a notice of share allotment with ACRA within 14 days of the allotment. It is important to note that private companies in Singapore may also have contractual obligations to disclose information related to their acquisition or merger to their shareholders or investors. These obligations can be stipulated in the company’s articles of association or in separate shareholder agreements.
THE NEED FOR ADAPTING TO THE DIGITAL ERA
Announcing corporate actions of limited companies in print media newspapers in Indonesia must adapt to the digital era. As society shifts towards online media, the Ministry of Law and Human Rights becomes crucial in ensuring these companies operate within a legal framework while contributing to the country’s economic growth. Therefore, the suitability of the current obligation to announce in newspapers is worth reconsidering.
CONCLUSION
While the shift towards digital media is significant and imminent, the legal validity of announcements made in print media newspapers must be addressed. This calls for a balanced approach that considers both the advantages of print media and the convenience of digital platforms. A deeper consideration of this issue is crucial to the future of corporate reporting in Indonesia.
For further information, please contact:
P: 6221. 7278 7678, 72795001
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S F Anggraeni
Managing Partner
Tanya Widjaja Kusumah
Managing Associate
Practice Group Legal Compliance and Governance
References
[1] Setyawati Fitrianggraeni serves as the Managing Partner at Anggraeni and Partners in Indonesia. She is also an Assistant Professor at the Faculty of Law, University of Indonesia, and a Ph.D. candidate at the World Maritime University in Malmo, Sweden. Tanya Widjaja Kusumah is the Managing Associate in the Legal Compliance and Governance Practice Group at Anggraeni and Partners and works closely with Sri Purnama. Sri Purnama is a Junior Legal Research Analyst from Anggraeni and Partners. The writers wish to express their gratitude to Dr. Hary Elias for his valuable feedback on the article.
[2] Accounting and Corporate Regulatory Authority (ACRA) is a statutory board under the Ministry of Finance of the Government of Singapore. ACRA is the regulator of business registration, financial reporting, public accounts, and corporate service providers.
Ministry of Communication and Informatics, Sorotan Media, Menkominfo: Masyarakat Akan Kembali ke Media Mainstream, https://www.kominfo.go.id/index.php/content/detail/11876/menkominfo-masyarakat-akan-kembali-ke-media-mainstream/0/sorotan_media, retrieved on 16 June 2023.
Central Bureau of Statistics, Data Sensus, Proporsi Penduduk Berumur 5 Tahun ke Atas yang Membaca Surat Kabar/Majalah (Media Cetak Maupun Elektronik) Selama Seminggu Terakhir menurut Provinsi, Tipe Daerah dan Jenis Kelamin, 2018, https://www.bps.go.id/statictable/2019/10/17/2077/proporsi-penduduk-berumur-5-tahun-ke-atas-yang-membaca-surat-kabar-majalah-media-cetak-maupun-elektronik-selama-seminggu-terakhir-menurut-provinsi-tipe-daerah-dan-jenis-kelamin-2018.html, retrieved on 16 June 2023.
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