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KSP Indosurya vows to settle clients' funds
Savings and loans cooperative KSP Indosurya Cipta is in the process of settling its obligations to clients after a court approved in July last year the peace agreement between the cooperative and its members.
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An office of the Indosurya cooperative is closed on March 28, 2020, amid large-scale social restrictions imposed in response to the COVID-19 epidemic. (Kontan/Carolus Agus Waluyo)
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avings and loans cooperative KSP Indosurya Cipta is in the process of settling its obligations to clients after a Jakarta court approved in July last year the peace agreement between the cooperative and its members.
The company stated that, as of Feb. 26, it had returned funds to 4,000 of its customers. Installment payments for members with funds above Rp 500 million (US$35,057) to Rp 1.99 billion, it said, had been carried out according to the Central Jakarta Commercial Court ruling.
Henry Surya, the cooperative’s founder, said in a statement on Tuesday that the cooperative would carry out the court's decision and continue making payments to members.
"As the founder and former administrator, I abide by the law. I also see that the KSP management is trying to implement the homologation decision properly," he said as quoted by news agency Antara.
Before the homologation ruling, Henry said he had confirmed that KSP Indosurya had committed to fulfilling its obligations toward members and had proposed PT Sun International Capital as the debt guarantor for the payment of member funds.
The guarantor will take over KSP Indosurya clients’ maturing debt by issuing convertible notes, in case KSP Indosurya is unable to return the funds that are due.
Last year, the cooperative failed to return funds worth Rp 10 trillion ($701.4 million) to 8,000 customers, citing “unfavorable economic conditions” affecting its financial performance.
In February last year, its customers started to come forward complaining that the cooperative had failed to return their funds.
The cooperative then said in a letter to the customers that it would pay all of its obligations to its customers “when the situation improved.” However, KSP Indosurya then filed for a postponement of debt repayments through the Central Jakarta Commercial Court on March 6.
Following the liquidity bind, the Cooperatives and Small and Medium Enterprises Ministry in June suspended KSP Indosurya licensing for three months.
The pandemic has caused several savings and loan cooperatives to face a decline in loan repayments. Members have withdrawn their savings, burdening the cooperatives with a decline in equity and complicating their internal consolidation and member services.
