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Industry association praises court's PKPU injunction for protecting local suppliers
A garment supplier association has lauded a commercial court's injunction against a Malaysian retailer in a class action lawsuit that pitted local MSMEs over unpaid consignment bills.
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Shop attendants in face shields and masks wait to serve customers on June 15, 2020 at a shopping mall in Serpong, Tangerang, Banten. (JP/R. Berto Wedhatama)
The Indonesian Association of Garment and Accessories Suppliers (APGAI) has expressed its appreciation for a court injunction granting a PKPU Sementara, or temporary suspension of debt payment obligation, in favor of local suppliers that sued PT Tozy Sentosa for debt.
Tozy Sentosa, the managing company of the Centro and Parkson department stores, is part of Malaysian retail giant Parkson Retail Asia, which is listed on the Singapore Exchange (SGX)
PT Primajaya Putra Sentosa, PT Indah Subur Sejati, PT Multi Megah Mandiri, PT Harindotama Mandiri and PT Mahkota Petreido Indoperkasa, all members of APGAI, filed the class action lawsuit with the Central Jakarta Commercial Court, reportedly citing the failure of Tozy Sentosa to pay them their share of proceeds from consignment sales.
On March 31, the court handed down its decision on the PKPU.
Under the mechanism, Tozy Sentosa as the debtor must work with its creditors to establish a new debt payment or settlement method with the supervision of a court-appointed administrator.
“The PKPU ruling is proof that the country’s justice system supports [local] suppliers, most of which are micro, small and medium enterprises [MSMEs] that have been plagued by uncertainty over unpaid consignment bills,” APGAI said in a recent statement.
APGAI said that Tozy Sentosa seemed resigned to the plaintiffs’ proposed resolution during the trial. The fact that the retailer had closed several outlets over the last few weeks had given the impression that the company wanted to leave Indonesia, it added.
“This raised concerns over the amount of losses that local suppliers must bear if Tozy Sentosa’s assets are much smaller than the liabilities left behind,” the statement said.
APGAI called on relevant government agencies to prevent the reoccurrence of similar cases so that local suppliers were not disadvantaged by foreign companies that invested in Indonesia.
In their debt lawsuit, the five companies also asked the court to hold a consultative meeting on progress in the PKPU proceedings no later than 45 days from the verdict, the maximum period for the temporary PKPU status handed down against Tozy Sentosa.
After 45 days, pending progress in negotiation between the debtor and its creditors, the court can decide on a permanent PKPU status (PKPU Tetap) against the debtor for a maximum 270 days.
