Following its recent controversial verdict declaring PT Telkomsel insolvent, the Jakarta Commercial Court is asking liquidators to supervise the nation’s largest cellular operator’s assets.
The court has appointed Feri S Samad, Edino Girsang and Mohamad Solihin as liquidators to assess the company’s books and to enforce court orders to settle the company’s debts.
Feri said on Monday that he and his colleagues had met the judge supervising the case to discuss implementing the court’s rulings.
“We just sent an announcement letter to Telkomsel [on Monday], and we will enter their premises on Wednesday,” Feri said.
The court declared Telkomsel bankrupt on Friday after it failed to pay Rp 5.3 billion (US$557,000) to PT Prima Jaya Informatika, the company’s top-up voucher distributor.
Corporate lawyers have criticized the verdict, as the decision did not reflect Telkomsel’s strong financial strength.
Telkomsel, which is 65 percent owned by state-run telecommunication company PT Telkom and 35 percent owned by Singapore’s SingTel, has total assets worth Rp 58.72 trillion ($6.2 billion) and booked net profits of Rp 12.82 trillion in 2011.
Legal experts said the court’s decision was based on a substantial shortcoming in the nation’s bankruptcy law that was prone to abuse and might endanger high-profile companies.
Among the earlier victims of the nation’s troubled bankruptcy law was the local unit of Canada’s insurance giant Manulife and British insurance powerhouse Prudential.
Feri, however, said that the liquidators would maintain Telkomsel’s value and assets when settling the company’s debts and claims.
“Liquidators have the tasks of maintaining the interests of both the debtor, Telkomsel, and the creditor, Prima Jaya. We still don’t know the company’s financial performance, as we haven’t seen their reports yet,” Feri said.
“A bankruptcy is not about whether a company is able to pay its debts, but more on its willingness to settle them,” Feri said.
According to the Bankruptcy Law, liquidators have great discretion to determine the fate of debtors while appeals work their ways through the court.
Liquidators are tasked with supervising a bankrupt company’s management and making payments to creditors. They also have the authority to manage debt settlements.
During the settlement procedure, a company is required to seek approval from liquidators before conducting any transaction or making any agreement.
Telkomsel lawyer Warakah Anhar has said that the company would appeal the ruling within the week, although the firm had not decided who would represent it in subsequent litigation. “We still don’t know who will be given the task for the appeal.”
Sources familiar with the matter said that Telkomsel would likely appoint Ricardo Simanjuntak, chairman of the Indonesian Liquidators and Administrators Association (AKPI), to represent the company.
Appeals are typically decided within three months of their filing.
Prima Jaya signed a deal in June 2011 with Telkomsel to distribute prepaid credit and subscriber identity module (SIM) cards for two years. However, according to Prima Jaya, Telkomsel unilaterally terminated the agreement, stopping delivery of cards in June, causing its losses.
Prima Jaya also proved that Telkomsel has other debts to PT Extent Media Indonesia of around Rp 40 billion.
Extent Media suffered losses after Telkomsel terminated its contract in response to the mobile credit siphoning scandal last year.
Prima Jaya attorney Kanta Cahya said that Telkomsel has several other debts following previous terminations of agreements.
“The debt settlement will involve all of Telkomsel’s creditors, not only Prima Jaya,” he said.
According to the law, a company can be taken to commercial court if it has failed to pay matured debts to at least two firms.