Indonesia’s largest mobile operator Telkomsel is to be taken over by liquidators according to local reports after the Jakarta Commercial Court ruled that the company was insolvent, despite its financial strength.
The Jakarta Post reports that the…
Indonesia’s largest mobile operator Telkomsel is to be taken over by liquidators according to local reports after the Jakarta Commercial Court ruled that the company was insolvent, despite its financial strength.
The Jakarta Post reports that the Court has appointed three “liquidators” who will settle the operator’s debt.
But online publication ZDNet quoted a lawyer working for Telkomsel saying the experts appointed by the court would be “receivers” rather than liquidators, and they would control the management and not liquidate the company.
According to the Jakarta Post Telkomsel will appeal the ruling.
The company was forced into bankruptcy last Friday after it failed to pay Rp5.3bn (US$0.5m) to PT Prima Jaya Informatika, which distributed Telkomsel’s top-up vouchers.
In Telkomsel’s most recent annual report the company declared total assets of Rp58.7tn (US$6.2bn).
Telkomsel is 65%-owned by Telkom, which in turn is majority-held by the Indonesian government, and 35%-controlled by SingTel, the Singapore-based mobile giant.
The judge’s decision to put Telkomsel into bankruptcy is controversial in Indonesia as the amount it owes would not bankrupt the company as such. However, The Jakarta Post quoted one of the liquidators arguing that a bankruptcy is not about whether a company is able to pay its debts, but more on its willingness to settle them.
The article also quoted legal experts sharply criticising Indonesian bankruptcy laws, describing them as prone to abuse and being able to put high-profile companies into danger.
Telkomsel also reportedly owes Rp40bn (US$4.2m) to PT Extent Media Indonesia. In Indonesia a company can be taken to commercial court if it has failed to pay matured debts to at least two firms.
