PT Hutama Karya demands review of bankruptcy ruling

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)