THE URGENCY OF APPLYING THE PRINCIPLES OF FULL AND FAIRNESS DISCLOSURE FOR COMPANIES ENGAGING IN BACK DOOR LISTING THROUGH MERGER SCHEMES

Abstract

Business activities in the capital market are conducted through the Initial Public Offering (IPO) process, where the sale of shares is facilitated by the Indonesia Stock Exchange (IDX). Juridically, the implementation of capital market activities through IPOs has been rigorously regulated. However, the regulatory mechanism is complex. Hence, companies often seek alternatives to enter the capital market and become public companies without undergoing the IPO process, utilizing the Back Door Listing (BDL) scheme. The BDL scheme streamlines capital market activities, especially for corporate actions like mergers, by circumventing the intricate IPO process. However, the BDL practice, particularly with a merger scheme, lacks a comprehensive legal framework and is only implicitly regulated in the explanation of Article 9 of the Financial Services Authority Regulation Number 9/POJK.04/2018 concerning the Takeover of Public Companies. Despite the absence of explicit regulations, this practice is widely employed by companies engaged in capital market activities, especially public companies. The unregulated nature of BDL in Indonesia has led to its misuse by companies seeking listing, posing potential risks such as fraud, market manipulation, insider trading, and dissemination of misleading information in the capital market. The research methods employed include normative law with a regulatory approach, conceptual approach, case approach, comparative approach, and reform-oriented research. The results demonstrate that the implementation of BDL practices, particularly in the form of mergers, must adhere to the principles of full and fair disclosure. By applying these principles, legal protection, legal certainty, and efficiency can be afforded to companies practicing BDL in Indonesia.