Shadow of PT Dua Kuda Indonesia Bankruptcy Raises Questions Among Foreign Investors
Jakarta – Legal certainty is one of the primary considerations for investors when deciding to inject capital into a country. Therefore, every legal case involving a foreign company has the potential to draw attention, not only for the company concerned but also for the broader investment world. This is now the focus in the bankruptcy case of PT Dua Kuda Indonesia, a subsidiary of the Chinese public company Zanyu Technology Group Co., Ltd. The case came to the fore after the Central Jakarta Commercial Court issued a bankruptcy ruling against PT Dua Kuda Indonesia. Yet, according to information in the company’s press release, the firm was said to still be running its operational activities normally, possessing large production capacity and recording stable export performance. This situation has raised a bigger question: how will it impact foreign investor confidence in Indonesia’s legal system and investment climate?
Bankruptcy Amidst a Company Deemed Solvent
The case is not merely a matter between the company and its creditors. Waves of objection have also come from management, legal counsel, and workers. The legal counsel for PT Dua Kuda Indonesia from ATS Law Firm even highlighted the condition of the creditors’ list in the case. One of the petitioners is said to actually have a debt obligation to PT Dua Kuda Indonesia based on a court ruling in China. Achmad Taufan Soedirdjo, legal counsel for PT Dua Kuda Indonesia, assessed that the case demonstrates the importance of ensuring that bankruptcy instruments are not used in a way that destroys the economic value of a going concern. “This is a clear example of how the misuse of bankruptcy law can become a weapon of economic destruction. Our client is a healthy, solvent company operating normally,” Taufan said in an official statement. The impact has reportedly even spilled over to the Chinese capital market. Shares of the parent company, Zanyu Technology Group Co., Ltd., were reported to have temporarily come under pressure, hitting the lower auto-reject limit due to investor panic.
An Alarm for Foreign Investors
For global investors, legal issues are not just about winning or losing in court. What is far more important is whether the legal system can provide certainty, consistency, and protection for business activities. The case of PT Dua Kuda Indonesia is considered to have the potential to become a concern for the international business community, as a company that is reportedly still solvent, operating, and employing local workers must face bankruptcy proceedings. Moreover, Indonesia continues to require foreign investment to strengthen its economic growth. Therefore, fair law enforcement that provides certainty is increasingly crucial. A corporate case should not create a negative perception of Indonesia’s investment climate. “Our laws must not become a source of bad introspection for the international world. We are an investment company that is very much needed,” Taufan stressed.
Going Concern is Key
The next issue is how to keep the company operating during the legal process. In the case of PT Dua Kuda Indonesia, a going concern permit from the Supervisory Judge is expected to preserve the company’s value. However, according to the company, its implementation is still facing administrative hurdles at the curator level. If production activities cease, the impact could be far broader. The export supply chain could be disrupted, the value of the company’s assets could be eroded, and ultimately the interests of all parties—including creditors—could be affected. There is also the issue of the workforce. More than 1,060 workers depend on the continued operation of PT Dua Kuda Indonesia’s factory. Peaceful actions repeatedly staged by the workers at the Central Jakarta District Court reflect their anxiety over their future employment and legal certainty. In the end, the PT Dua Kuda Indonesia case is not just about one company. This case touches on a much larger question: to what extent can legal certainty maintain foreign investor confidence while protecting the continuity of companies, workers, assets, and economic activity? The answer to this question will be important, not only for PT Dua Kuda Indonesia, but also for the face of Indonesia’s investment climate in the eyes of the world.