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APINDO seeks extension of loan restructuring program, moratorium on bankruptcy petitions
A significant increase in the number of insolvency and bankruptcy petitions has prompted demands for a temporary halt of such cases, which critics say have been abused to take unfair advantage of indebted companies. But a moratorium would put more pressure on banks.
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A significant increase in the number of insolvency and bankruptcy petitions has prompted demands for a temporary halt of such cases. (Shutterstock/File)
T
he Indonesian Employers Association (APINDO) is in talks with the government and the Financial Services Authority (OJK) to propose a three-year extension for debt postponement petition (PKPU) and bankruptcy lawsuits as well as the loan restructuring program, as some businesses may need more time to recover.
APINDO chairman Hariyadi Sukamdani said the business group had discussed the plan with the Legal Administration Directorate General of the Law and Human Rights Ministry, hoping for a government regulation on such a moratorium “as soon as possible.”
“The pandemic has a huge potential to cause problems,” Hariyadi told The Jakarta Post in a phone interview on Tuesday. “Many companies suddenly face financial problems. That opens the door for irresponsible parties to take advantage of [their vulnerability].”
The request follows a rise in the number of PKPU and bankruptcy cases as the COVID-19 pandemic forced many businesses to stop operating under government-imposed activity restrictions.
In August, 440 PKPU cases were filed with the Central Jakarta District Court, an increase of 57 percent from a year earlier, according to news agency Katadata, quoting data from the district court.
Hariyadi estimated that some 95 percent of the PKPU cases were filed by creditors, even though the law’s purpose is to help borrowers in financial trouble. The law contained several loopholes, said Hariyadi, such as the chance for plaintiffs to file PKPU cases several times even after previous rejections.
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