House unanimously approves new bankruptcy bill

House unanimously approves new bankruptcy bill

JAKARTA (JP): The House of Representatives approved yesterday
a new bankruptcy bill in a move the government hopes will attract
foreign investors to the country.

The House unanimously passed the bill in a plenary session
attended by Minister of Justice Muladi. The bill will now be sent
to President B.J. Habibie for final approval before its scheduled
enactment on Aug. 20.

"The bill includes (provisions for) the handling of bankruptcy
cases within a fixed and short period of time and it
will provide a strong legal basis particularly for the handling
of the debt problems following the monetary crisis," Muladi said.

He said the government had trained 45 judges to handle cases
in a specially created commercial court once the law takes
effect.

The bill, which was ratified as a Government Decree in Lieu of
Law issued in April, replaces an antiquated law dating back to
1905.

The legislation was drafted hurriedly in the midst of the
economic crisis as there was a pressing need for such a law given
the numerous bankruptcies and massive dismissals of workers
hitting numerous companies across the country.

It will give legal basis for investors to dissolve their
companies.

Muladi said the first commercial court would be opened in
Jakarta while several others -- in Surabaya, East Java;
Ujungpandang, South Sulawesi; and Medan, North Sumatra -- would
follow soon afterward.

He said that the law's existence was expected to bolster
investor confidence in the Indonesian economy "so that our
economy can grow robustly in the future".

Yesterday's ratified bill is expected to be eventually
replaced by a more permanent and comprehensive law, as the
current legislation was drafted against the backdrop of the
economic crisis.

The government is expected to begin preparing the
comprehensive draft law one year after the date of the current
legislation's enactment.

Muladi pledged the government's willingness to cooperate and
consider public inputs and suggestions when preparing the more
comprehensive insolvency law.

The Golkar faction, in its address to the session, stressed
several points it said should be taken into account in the future
law.

Ridwan Sani, who delivered Golkar's outlook in the meeting,
said that a company which borrowed from two creditors and could
not pay back its debt one year after the agreed schedule should
be called bankrupt.

He said that the commercial court should also announce a
verdict within 30 days after an insolvency lawsuit is filed.
(rms)