Tony Hotland and Yuli Tri Suwarni, Jakarta/Bandung – State-owned aircraft manufacturer PT Dirgantara (PTDI) was on Monday declared bankrupt by Indonesia's commercial court system. The court said PTDI was on the verge of demise and had several long-overdue debts but PTDI said it would appeal to the Supreme Court.
The company said its defense would continue to be that it was still operating and had orders from overseas that would see it through to at least 2017.
The lawsuit against the aircraft manufacturer was filed last month by some 6,500 former employers who were dismissed in 2003. They were told then the company was being restructured. The employees have demanded the company pay their pension funds and retirement allowances as per their last salaries.
PTDI currently employs 3,200 employees and has said it has no further obligations to pay said pension or retirement funds, which amount to some Rp 200 billion (US$21.5 million).
The presiding panel of judges said the evidence against Bandung-based PTDI was incriminating. Presiding judge Andriani Nurdin said a document issued by the Committee for Central Labor Disputes (P4P) in January 2004 showed the company had been required to pay the compensation.
A warning letter issued by the then-manpower and transmigration minister in October 2004 obligated PTDI to pay the funds within 30 days.
The court also saw the company had outstanding debts to other creditors including Bank Mandiri at Rp 125 billion, as well as individuals Supriadi Jasa at Rp 79 million and Neli Ratna Sari at Rp 15 million.
The court found the company's defense was baseless. "The document simply shows estimates that are not supported by adequate infrastructure and capital," judge Heru Pramono said, adding that there was no reason left to sustain the company.
The court appointed curator Taufik Nugroho to appraise the company's standing assets and Zulfahmi as the overseeing judge.
Legal expert Frans H. Winarta said a bankruptcy status would force the company to pay back all of its debts and compensation to its current employees.
If the value of its assets is lower than the overall debts, the company should pay according to a proportion based on the amount of debt of each creditor, Frans said. "But this cannot be executed until there's been a verdict from the Supreme Court."
A pioneer in Asia's aviation industry, PTDI was set up as PT Industri Pesawat Terbang Nurtanio in 1976 with then-research and technology minister BJ Habibie as president director. The 1997 Asian financial crisis forced it to restructure and reduce its payroll from almost 10,000 to less than 4,000.
In Bandung, West Java, company spokesmen Rakhendi Priyatna said the company was "starting to pick up its pieces with orders coming from in and out of the country". "A bankruptcy verdict will lead to complaints and even penalties regarding our current production," he said.
Workers at the company appeared unaffected but said they deplored the verdict. They said they believed the company would win the case at the Supreme Court.