Indonesia: fail to notify at your peril

Published On 11/01/2013 | By Kim de Kock | Enforcement, Mergers

The Indonesian Commission for Supervision of Business Competition (KPPU) has, for the first time, unequivocally demonstrated that it will not accept any deviation from the statutory time periods within which companies are required to notify mergers.

As indicated in our previous post, the KPPU published a regulation on 2 October 2012 that refined the procedure for imposing fines for late notification or failure to notify a merger.  Just over two months later, in mid-December 2012, the KPPU used the procedure to slap Honda retailer Mitra Pinasthika Mustika (Mitra) with a 4.6 billion Rupiah fine (US$477,000) for late notification of its acquisition of a local car rental company, Austindo Nusantara Jaya Rent.

Under Indonesia’s merger control regime, Mitra was required to notify the KPPU within 30 days of completing the acquisition.  While the acquisition completed on 31 January 2012, the KPPU was only notified of the deal at the end of April 2012, about two months after it should have been notified.

While the KPPU was entitled to fine Mitra 25 billion Rupiah, being one billion Rupiah per day of delay up to a maximum of 25 billion Rupiah, a seemingly modest 4.6 billion fine was ultimately imposed.

This fine serves as a warning to merging parties in Indonesia that minimal, if any, leeway will be granted for failing to abide by the country’s merger control laws.

Photo credit: Anis Eka / Foter / CC BY

 

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About The Author

is a Senior Associate in the Sydney office of King & Wood Mallesons where she specialises in anti-trust law, with a focus on mergers and acquisitions, access matters as well as general competition issues. Outside of the office, Kim has recently taken up surfing... but is probably not going to be appearing on the ASP tour any time soon.

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