PT Hutama Karya demands review of bankruptcy ruling
JAKARTA (JP): State-owned construction firm PT Hutama Karya, has filed a judicial review against a bankruptcy ruling issued by the Supreme Court against the company.
Minister of Public Works Rachmadi Bambang Sumadhijo, said on Tuesday it was in the interest of the ministry to retain Hutama Karya because of its leading role in the domestic construction sector and the thousands of employment opportunities provided by the company.
"Based on our assessment, the asset size of Hutama Karya is much larger in value than claims made by the plaintiffs," he told Antara following a debate session on the new bill on construction services at the House of Representatives.
Hutama Karya, one of the country's major construction companies, is under the supervision of the Ministry of Public Works.
The Supreme Court declared Hutama Karya bankrupt -- the first such verdict on a state-owned company -- on Feb. 23 because of its inability to repay Rp 2.08 billion in construction fees to PT Jaya Readymix and Rp 283.3 million to PT Primacoat Lestari.
Jaya Readymix and Primacoat Lestari filed a joint bankruptcy claim against the state-owned firm in December last year but the petition was turned down in the commercial court.
Judge Parwoto Wignjo Sumarto said the bankruptcy request was rejected because Hutama Karya did not have any direct debt obligation to the two private construction firms.
The plaintiffs were not satisfied with the court ruling and appealed to the Supreme Court.
The Supreme Court's decision was not made public until the daily Kompas reported the finding on Tuesday.
Rachmadi also urged Hutama Karya to renegotiate its debts with the creditors, in addition to appealing for a judicial review against the bankruptcy verdict.
Indonesia's new bankruptcy law was introduced last August to provide an exit facility for creditors wishing to settle their unpaid loans through a commercial court.
The launching of the new law and commercial court is part of an agreement between the government and the International Monetary Fund which is providing the country with a multibillion dollar bailout.
But the enforcement of the bankruptcy law as well as the performance of the commercial court is discouraging, analysts say, pointing out that several court decisions have been questionable.
Separately, legislator Burhanuddin Napitupulu said the government should accept the bankruptcy verdict on Hutama Karya because the company was saddled with massive debts, causing banks to lose confidence in the company.
"In addition, Hutama Karya has no technological advantage and many of its assets are unproductive."
He urged other state-owned companies under the Ministry of Public Works to merge into a solid company in order to avoid a similar fate.
"Many of the state-owned companies are not efficient and their market segment is declining." (rei)