Indonesia expected to have merger rules before October

JAKARTA, July 27 (Xinhua) -- Indonesia is expected to have merger and acquisition rules before October, ahead of President Susilo Bambang Yudhoyono being inaugurated for his second term, an official said on Monday.

Tri Anggraini, head of the rule draft team on merger an acquisition, said that currently the draft was 50 percent finished.

"The draft is being discussed by the parliament in the plenary meeting and entering 'the harmonization phase'. Hopefully, the president could sign the draft to be government rules before October," she said.

Tri said that the rules would fortify legal basis for merger and acquisition being implemented by the Indonesia's Commission for Surveillance on Business Competition (KPPU).

"For example, today we issue a rule urging companies who want to merge with others and to acquire others to report before the actions taken," she said.

The pre-notification is a voluntary notification to gain the KPPU's opinion about the impact triggered by the plan.

"Although it is a voluntary notification, it still has legal basis. We can impose section 28 of the Law No. 5/1999 about ban on monopoly practice and unhealthy competition. Or, we can cite other sections related to the action so we can cancel the action," said Tri.

Concerning to the demand, the commission said that it has been coordinating with the central bank, Bank Indonesia (BI) and the Investment Coordination Agency (BKPM).

"The BKPM has its own procedure that companies want to merge or acquire others have to report to the agency 10 days before the action. We have asked the agency to order banks or companies that want to have such action to report to the KPPU first," she said.

She also said that currently, the BI has been composing a rule regarding to the merger and acquisition, and the KPPU was invited to give inputs.

According to the KPPU, business players are prohibited to merge or acquire business units that could trigger monopoly practices and unhealthy competition.