Corporate Governance and Shareholder Disputes
By Adhit Prasetyo, S.H., CLA
Minority ownership does not necessarily mean an absence of legal protection. A more difficult issue often arises when shareholders do not receive sufficient information to assess whether a transaction or an action by management has caused loss to the company.
Law No. 40 of 2007 on Limited Liability Companies, as amended under the Job Creation regime enacted by Law No. 6 of 2023 (the “Company Law”), provides a mechanism for the court-ordered examination of a company. This mechanism allows qualifying shareholders to ask the court to appoint experts to obtain the necessary data or information.
The PT Sumalindo Lestari Jaya Tbk. proceedings provide an important illustration of how this mechanism operates. The decisions also demonstrate its limits: a company examination is a means of obtaining information and testing allegations, rather than a final determination of liability or the validity of a transaction.
The circumstances giving rise to the company examination
Deddy Hartawan Jamin and Imani United Pte. Ltd. respectively held 8.52% and 5.26% of the voting shares in PT Sumalindo Lestari Jaya Tbk. Their aggregate shareholding was 13.78%.
The shareholders sought a company examination after they were unable to obtain adequate information concerning several corporate actions. One of the issues raised concerned the sequence of events surrounding a proposed divestment of shares in the company’s subsidiary, PT Sumalindo Hutani Jaya.
In the reasoning of the South Jakarta District Court, which was later reproduced in the reconsideration decision, the divestment plan was considered to have been formulated before the Extraordinary General Meeting of Shareholders (“EGMS”). A sale and purchase undertaking dated 15 July 2009 also preceded the appointment of an independent appraiser on 13 August 2009.
This sequence was considered sufficient to justify an examination into the transparency and impact of the transaction. However, this was a preliminary assessment of whether an examination was warranted. The court did not make a final finding that the transaction constituted an unlawful act.
What did the courts decide?
South Jakarta District Court
Under Order No. 38/Pdt.P/2011/PN.Jkt.Sel., the South Jakarta District Court granted the application for a company examination.
The court appointed a financial audit expert and a forestry industry expert, determined the scope and duration of the examination, and required the Board of Directors, Board of Commissioners and employees of the company to provide the data and access required by the experts.
Supreme Court at the cassation stage
In Decision No. 3017 K/Pdt/2011, the Supreme Court dismissed PT Sumalindo Lestari Jaya Tbk.’s cassation appeal and upheld the examination order.
The Supreme Court considered that:
- the applicants’ aggregate shareholding of 13.78% exceeded the threshold of one-tenth of the shares carrying voting rights;
- the applicants had requested data in writing at the EGMS held on 15 October 2009;
- the company had not provided the requested explanation; and
- the lower court had not erred in assessing the evidence supporting the need for an examination.
The Supreme Court also found that certain objections raised by the company essentially sought a reassessment of the facts and evidence. Such reassessment fell outside the scope of cassation proceedings.
Supreme Court at the reconsideration stage
The application for reconsideration was subsequently dismissed in Decision No. 217 PK/Pdt/2014.
The Supreme Court found no judicial error or manifest mistake in the earlier decision. A criminal acquittal submitted by the company was also not regarded as decisive evidence in determining the application for a company examination.
Accordingly, what was upheld through the reconsideration stage was the company examination, rather than a final finding that an unlawful act had occurred.
How does the Company Law protect minority shareholders?
The Company Law does not establish a single general action known as minority oppression. Instead, it provides several distinct protection mechanisms, depending on the nature of the loss and the legal outcome sought.
For company examinations, Articles 138 to 141 of the Company Law establish a controlled procedure.
An examination may be requested to obtain data or information where there is a suspicion that:
- the company has committed an unlawful act causing loss to shareholders or a third party; or
- a member of the Board of Directors or Board of Commissioners has committed an unlawful act causing loss to the company, its shareholders or a third party.
An application by shareholders must satisfy several principal requirements:
- it must be submitted by one or more shareholders who collectively represent at least 10% of all shares carrying voting rights;
- it must be submitted in writing, with reasons, to the district court having jurisdiction over the company’s registered domicile;
- it must be preceded by a request for data or information from the company through a General Meeting of Shareholders (“GMS”);
- the company must have failed to provide the requested data or information; and
- the application must be based on reasonable grounds and made in good faith.
If the application is granted, the chair of the district court may appoint up to three independent experts. The experts may examine documents and company assets considered necessary. The Board of Directors, Board of Commissioners and employees must provide the information required.
The experts must keep the results of the examination confidential. Their report must be submitted within the period determined by the court and no later than 90 days after their appointment. The court must then provide copies of the report to the applicant and the company no later than 14 days after receiving it.
The examination costs are initially paid by the company. However, at the company’s request, the court may order the applicant or relevant members of the Board of Directors or Board of Commissioners to reimburse all or part of those costs.
This mechanism does not give shareholders unlimited direct access to all company documents. Access is exercised by the court-appointed experts, while the applicant receives the examination report.
What did the Sumalindo decisions establish, and what did they not establish?
The Sumalindo decisions demonstrate that multiple shareholders may aggregate their shareholdings to meet the 10% threshold. They also illustrate the importance of requesting information through a GMS, documenting the company’s failure to provide that information, and presenting sufficient grounds to explain why an examination is required.
However, the decisions did not:
- make a final finding that all disputed transactions constituted unlawful acts;
- invalidate the divestment or any other transaction examined;
- find that the Board of Directors or Board of Commissioners had breached their duties;
- award damages to the shareholders; or
- replace a direct or derivative action.
A company examination should be understood as a process for obtaining and testing evidence. The experts’ report may provide a basis for determining whether further legal action is required, but it does not itself invalidate a transaction or impose personal liability.
Sumalindo was also a publicly listed company. Article 138(6) of the Company Law recognises that capital-market regulations may prescribe different provisions for certain requirements. The application of this mechanism to an issuer or public company must therefore be reassessed against the capital-market and Financial Services Authority regulations in force when the application is filed.
What should shareholders do?
Before applying for a company examination, shareholders should:
- ensure that their share ownership and voting rights are properly recorded and can be evidenced;
- identify the specific transaction, decision, data or information required;
- submit the request through a GMS and preserve evidence of the request, minutes, questions and the company’s responses;
- prepare a chronology demonstrating reasonable grounds for the suspected loss;
- explain the purpose of the examination and demonstrate good faith;
- identify the relevant expert qualifications and scope of examination; and
- distinguish between a shareholder’s personal loss and loss suffered by the company.
After the examination report is obtained, the appropriate legal course should be determined by its findings. The available options may include:
- a direct action under Article 61 of the Company Law where a shareholder suffers loss from an act of the company considered unfair and unreasonable as a result of a resolution or decision of the GMS, Board of Directors and/or Board of Commissioners;
- requiring the company to purchase the shareholder’s shares at a fair price under Article 62 in relation to specified corporate actions;
- an action on behalf of the company against the Board of Directors under Article 97(6);
- an action on behalf of the company against the Board of Commissioners under Article 114(6);
- requesting the convening of a GMS under Articles 79 and 80; or
- a commercial resolution involving document disclosure, an independent valuation, a share purchase, management restructuring or an exit arrangement.
For a foreign-owned company or cross-border joint venture, the analysis should also cover the articles of association, shareholders’ agreement, financing arrangements, veto rights, share-transfer restrictions, arbitration clauses, and applicable investment or sectoral regulations.
Implications for directors and controlling shareholders
A failure to provide adequate information through a GMS may strengthen the basis for an application for a company examination. The Board of Directors should therefore not treat shareholders’ questions as a formality.
The company should provide substantive answers to the extent this does not conflict with the company’s interests, legitimate confidentiality obligations or applicable laws and regulations. GMS minutes, independent valuation reports, conflict-of-interest documents, corporate approvals and transaction chronologies should be maintained consistently.
In our view, transparent governance at an early stage is generally more efficient than facing a court-ordered examination after relations among the shareholders have deteriorated.
Key takeaways
- Minority shareholder status alone is insufficient. The ownership threshold, prior request for information through a GMS, reasonable grounds and good faith must still be established.
- A company examination is a mechanism for obtaining data or information and testing allegations, rather than a final victory in a shareholder dispute.
- Shareholders must select the appropriate remedy by identifying who has actually suffered the loss and the outcome sought.
- Companies should respond substantively to information requests and maintain proper records for every material transaction or transaction potentially involving a conflict of interest.
To assess whether a company examination or another shareholder-protection mechanism is appropriate in light of your ownership structure, articles of association, shareholders’ agreement and transaction documents, please contact Prasetyo Law Office.
Prasetyo Law Office is a Jakarta-based Indonesian law firm providing integrated legal services across a range of matters, from commercial transactions to cross-sector litigation. Drawing on years of experience, we understand not only the applicable regulatory framework but also our clients’ industry dynamics and business characteristics. We provide comprehensive legal advice and strategic solutions to help clients mitigate legal risks across their business activities.
Prasetyo Law Office
Infiniti Office, Indonesia Stock Exchange Building, Tower 1 Level 3 Suite 304
Sudirman Central Business District (SCBD)
Jl. Jenderal Sudirman Kav. 52-53
South Jakarta, DKI Jakarta 12190
Phone: +6221 5890 5002 ext. 105
E-mail: info@prasetyolawoffice.com
Primary sources:
- Law No. 40 of 2007 on Limited Liability Companies, particularly Articles 61, 62, 79, 80, 97(6), 114(6), and 138 to 141.
- Official text of Law No. 40 of 2007.
- Law No. 6 of 2023 on the Stipulation of the Government Regulation in Lieu of Law on Job Creation as Law.
- Supreme Court Decision No. 3017 K/Pdt/2011, particularly pages 23–24 and 46–47.
- Supreme Court Decision No. 217 PK/Pdt/2014, particularly pages 20–24 and 33–34.
Last verified: 4 August 2026.
Disclaimer: This publication is provided for general information and educational purposes based on the laws and materials available as at 4 August 2026. It does not constitute legal advice or a formal legal opinion and should not be relied upon as the sole basis for any transaction, corporate action or dispute. Indonesian laws, judicial interpretations and corporate practices may change. Advice tailored to the relevant facts and verification of current requirements should be obtained before taking action. Receipt or use of this publication does not create a lawyer-client relationship.
