Backgound
According to Article 138 paragraph (1) Law Number 40 of 2007 on Limited Liability Companies (“Company Law”), Inspection toward a Company may be performed with the purpose of obtaining data or information regarding suspicion that a Company has committed acts which violate the law and are detrimental to shareholders or third parties; or if member of the Board of Directors (“BOD”) or Board of Commissioners (“BOC”) commits acts which violate the law and are detrimental to the Company or shareholders or third parties.
Procedures of Companies Inspection
1. Submission of Petition
The Company inspection shall be carried out by submitting a petition in writing letter together with the reasons to the district court of where jurisdiction covers the Company’s domicile. The petition may be submitted by:
a. 1 (one) or more shareholders who represents at least 1/10 (one tenth) of the total number of shares with voting rights;
b. Other parties who are authorized to submit a petition for inspection by virtue of legislative regulations, the Company’s article of association, or contracts with the Company;
c. The public prosecutors’ office in the public interest.
The petition contemplated in number 1 (a) above, shall be submitted after the petitioner has first requested the Company for data of information in a General Meeting of Shareholders (“GMS”) but the Company does not give the data or information (Article 138 paragraph (4) of Company Law). Petitions to obtain information or petitions to perform the inspection must be based on reasonable grounds and in good faith (Article 138 paragraph (5) of Company Law)
2. Inspection
The Chairman of the district court may refuse or grant the petition if the petition is not based on reasonable grounds and in good faith. If the petition is granted, the Chairman of the district court shall issue an order for inspection and appoint at least 3 (three) experts to carry out the inspection with purpose of obtaining the data or information required (Article 139 (3) of Company Law). Three (3) experts that may be appointed shall not be from among the members of BOD, member of BOC, employee of the Company, consultant or public accountant which has been appointed by the Company.
The experts contemplated in Article 139 paragraph (3) of Company law are entitled to inspect all documents and assets of Company they deem it is necessary to know, and also must keep the inspection’s result they carried out confidential. Each member of the BOD, member of BOC, and all employees of the Company then are obligated to give all information necessary for the inspection to be carried out.
3. Report on the Inspection Outcome
Report on the inspection outcome is delivered by the experts to the Chairman of district court within the period specified in the court order for the inspection which is no later than 90 (ninety) days from the date of the appointment of the experts. Then, the Chairman of the district court gives the copy report of the inspection outcome to the petitioner and the Company concerned within a period of no more than 14 (fourteen) days as from the date when the report of the inspection outcome has been received. (Article 140 paragraph (1) and (2) of Company Law)
4. The Payment of Inspection Costs
After the petition for an inspection is granted, the Chairman of the district court determines the maximum cost of the inspection. In determining the inspection cost for the inspectors, the Chairman bases it on the inspectors’ level of expertise, the ability to pay of the Company as well as the scope of the Company, because the cost of inspection shall be covered by the Company (Article 141 paragraph (1) and (2) of Company Law).
However, the Chairman of the district court upon the request by the Company may charge all of the reimbursement or a half of the inspection cost which is covered by the Company to the petitioner, the members of the BOD, and/or the members of the BOC in accordance with the consideration on the inspection outcome later on.
Sofie Widyana P.
