Telkomsel Overturns Bankruptcy Order
Published on: 26th Nov 2012
Note -- this news article is more than a year old.
Indonesia's Telekomunikasi Seluler (Telkomsel) has formally overturned the slightly bizarre bankruptcy order that was secured against the company a couple of months ago.
Although the company is profitable, a creditor was able to secure an order declaring the company bankrupt thanks to a strange quirk of Indonesian business law. A SIM card distributor, PT Prima Jaya Informatika filed a claim for US$557,000 against the phone network as part of a dispute.
Under Indonesian law, a company can be declared bankrupt if the plaintiff can show that the company has failed to pay matured debts to two creditors, regardless of the amount of the debts or the company's financial condition.
As there was also a second unrelated creditor complaining about the company - the lower court had to issue the bankruptcy order.
The Supreme Court has now formally overturned that verdict in a move which was widely expected.
The earlier bankruptcy decision also focused attention on the country's antiquated business legislation and changes are expected to be proposed by the government.