Navigating Bankruptcy in Indonesia:
Key Impacts and Procedures

Bankruptcy in Indonesia triggers substantial legal and financial consequences that extend beyond unpaid debts. A court-appointed curator takes control of the debtor’s assets to settle outstanding obligations.

Asset Seizure and Restricted Business Operations

This process restricted business activities, disrupting production and sales. Government assistance aims to expedite the mediation between Sritex management and curators and support export-import operations for continued revenue generation, even under bankruptcy status.

Legal, Financial, and Reputational Consequences

A bankruptcy declaration halts ongoing lawsuits and forces all creditor claims into the bankruptcy process, often delaying debt repayment. The case of Sritex emphasizes that a relatively small debt—here, around Rp 101 billion—can lead to broader financial ruin if left unmanaged. Minister of Manpower Yassierli emphasized that the company’s failure to mitigate this debt turned a minor issue into a large-scale financial crisis. This legal action has also damaged the company’s reputation with suppliers and clients, affecting potential recovery.

Reputational Damage and Employee Impact

The public nature of Sritex’s bankruptcy has impacted employee morale, with concerns about job security and severance payments leading to protests. Minister Yassierli underscored the need for companies to implement strong risk management systems to avoid similar outcomes. The government is closely monitoring cases like these to provide guidance and support as necessary.