The Jakarta Commercial Court has ordered receivers to supervise the assets of the country's largest telco Telkomsel, after its controversial decision to declare the company bankrupt, for failing to pay a debt.
In a report Tuesday, the Jakarta Post noted that "liquidators" had sent a letter of notice to Telkomsel on Monday, and would enter its premises on Wednesday. It added that the "liquidators" would assess the company’s accounts and enforce court orders to settle its debts.
However, Ricardo Simanjuntak, Telkomsel's appointed lawyer, clarified with ZDNet Asia on Wednesday that "nothing would be liquidated" and it would be more appropriate to call them "receivers" who would control the management of the company.
Bankrupt verdict not reflection of fiscal position
The court had declared Telkomsel bankrupt last week, after it failed to pay 5.3 billion rupiah (US$557,000) to Prima Jaya Informatika, its top-up voucher distributor.
According to legal experts interviewed by the Jakarta Post, the court’s decision was based on a "substantial shortcoming" in the bankruptcy rules.
It cited senior lawyer Todung Mulya Lubis, who felt the law was prone to abuse and did not accurately reflect the company's fiscal health.
"An article in the law says that a court may declare a company bankrupt if it finds that the company has two or more outstanding debts. It is too easy. There should be other things the justice system considers before delivering this verdict,” he said in the article.
Simanjuntak said the company was upset with the court decision, and emphasized that under Indonesia's system, being declared bankrupt was different from being insolvent. He pointed out that Telkomsel was in a healthy fiscal position, and this was just a legal proceeding to settle the debt.
According to Telkomsel's annual report in 2011, the company had total assets of 58.7 trillion rupiah (US$6.2 billion) and posted a net profit of 12.82 trillion rupiah (US$1.3 billion) that year.
He explained that what would happen next would be for the receivers to call a meeting between creditors and Telkomsel, to come to an agreement, if possible.
"There is no telling how long the process will take, but hopefully it will be settled as fast as possible," Simanjuntak said. He added business would go on as usual, and "maintaining the company's value" would be one of the mandates of the receivers.
Telkomsel disputing claim
Telkomsel is disputing the claims filed by Prima Jaya Informatika and has filed an appeal, according to the lawyer.
Simanjuntak explained the dispute stemmed from a deal handed to the distributor, which Telkomsel said failed to meet its sales target set. However the distributor still sought full payment, and proceeded to file a court petition.
The lawyer added that this was unfair and drew an analogy: "If I agreed to buy a TV set from you, how can you claim for the price of the TV if I didn't get it from you?"
Telkomsel is majority controlled by state-owned Telkom, with the rest of the 35 percent stake owned by Singapore's
"SingTel supports Telkomsel's decision to lodge an appeal," the Singapore telco's spokesperson told ZDNet Asia on Thursday. She pointed out that Telkomsel was a "financially strong company", with net assets of 35 trillion rupiah (US$3.8 billion), as at 30 June 2012.
Updated 20/9/2012 with statement from SingTel