PT. Dirgantara Indonesia (PT DI) Bankruptcy Case are likely to establish sustainable interpretations of the Bankruptcy Law (Law No. 37 of 2004) and in particular interpretations relating to matters such as insolvency and the legal standing of a party to file for the bankruptcy of a State-Owned Enterprise (Badan Usaha Milik Negara / BUMN). In this bankruptcy case, PT DI is a limited liability company (Perseroan Terbatas / PT) that is subject to the rules prescribed in the Bankruptcy Law. Nevertheless, PT DI is 100% owned by the State which might subject PT DI to the rules and regulations under State’s Finance Law and State’s Treasury Law.

According to the Law on State Finance (Law No. 17 of 2003), the Law on the State Treasury (Law No. 1 of 2004), and the Law on State Owned Enterprises (Law No. 19 of 2003) State assets cannot be subject to seizure. Following this provision, questions arise on how to execute a bankruptcy decision awarded to a SOE if the company, and indirectly company’s assets are owned by the State. The issue became more complicated whenever the debt holder is a non-government third party. Learning from this case, business actors should be aware that although SOE in the form of a limited liability company can be subject to bankruptcy, the implementation of bankruptcy awarded to such company will certainly have a different nature compared to other limited liability company.  

Source: www.hukumonline.com, ILB 29/9/2007: The Bankruptcy Decision against PT. Dirgantara Indonesia-Unsustainable