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LEGAL RESTRICTION OF BANKRUPTCY OF STATE-OWNED ENTERPRISE (SEO) AND SUSTAINABILITY: THE CASE OF INDONESIA
Corresponding Author(s) : M. Hadi Shubhan
Humanities & Social Sciences Reviews,
Vol. 8 No. 1 (2020): January
Abstract
Purpose of Study: This research examines the possibility of state-owned enterprises being nailed in the legal system in Indonesia. According to the bankruptcy regulation in Indonesia, those who are unable to pay debts can be declared bankrupt by the creditors, including SOEs. However, other regulations state that the government’s assets (including those within SOEs) cannot be confiscated, including within bankruptcy confiscation.
Methodology: The research method used in this study is qualitative research using the type of doctrinal law research. The approach used is to use the statutory approach, conceptual approach, and case approach. Data from this study were obtained from commercial courts in Jakarta and Surabaya.
Main Findings: This study found that there was a desynchronization of the regulations regarding the SOEs’ bankruptcy, i.e., between the Bankruptcy Law and the other laws, and even points within the Bankruptcy Law itself. The example that can be taken in this study is PT Kertas Leces /Limited Liability Company (LLC) Kertas Leces) that had already gone bankrupt and experienced confiscation of its bankrupt assets.
Implications: The ideal bankruptcy model for SOEs is that the bankruptcy applicants for SOEs in the form of public companies or state-owned companies should be the Minister of Finance. The Ministry of Finance is responsible for the operational policies and supervision of SOEs, amounting to approximately 115 companies in the form of public companies or state-owned companies, including those that have already gone public and those which have not.
Novelty: Previous studies have only focused on the assets of state-owned enterprises that have been separated and therefore bankrupt. This study examines another matter, namely that not all state-owned enterprises can be declared bankrupt and found one state-owned bankruptcy.
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- kbar, Ahsan, et. All. (2019). Is Bankruptcy Risk Tied to Corporate Life-Cycle? Evidence from Pakistan, Sustainability, 11, 678. https://doi.org/10.3390/su11030678 DOI: https://doi.org/10.3390/su11030678
- Al-Tawil, Tareq Na'el. (2018). Piercing the Corporate Veil: When LLCs and Corporations May at Risk, International Journal of Law and Management, 07, 0140. https://doi.org/10.1108/IJLMA-07-2018-0140 DOI: https://doi.org/10.1108/IJLMA-07-2018-0140
- Beraho, Enoch K. (2008). A study of global bankruptcy trends: examples from USA, UK, Australia, Ukraine, Malaysia, and China. Problems and Perspectives in Management, 6(3).
- CC. Pembatalan Homologasi. (2018). Commercial Court at the Surabaya District Court, 1, 1, 2018.
- CC. PailitLeces. (2014). Commercial Court at the Surabaya District Court, 5, 2014.
- CC. Pembatalan Homologasi PK. (2019). Supreme Court with the decision of a Judicial Review, Number, 2019.
- CC. Medan. (2005). Commercial Court at the Medan District Court, number 02, 2005.
- CC. QSAR. (2013). Commercial Court in Central Jakarta District Court, number 23, 2013,
- CC. Bumi Asih. (2015). Commercial Court at the Central Jakarta District Court, Number 408, 2015.
- CC. Bumi Asih 2. (2015). Commercial Court at the Central Jakarta District Court, Number 04, 2015.
- CC. Bumi Asih 3. (2015). Commercial Court at the Central Jakarta District Court, Number 27, 2015.
- Declercq, Peter J.M. (2002).Netherlands Insolvency Law, The Netherlands Bankruptcy Act and The Most Important Legal Concept, The Haque : T.M.C. Asser Press, p. 63. https://doi.org/10.1007/978-90-6704-533-9_1 DOI: https://doi.org/10.1007/978-90-6704-533-9_1
- Djohansjah. (2004). â€Kreditor Preferen dan Separatis†(Preferred Creditor and Secured), quoted by : Emmy Yuhassarie (ed.), Undang-Undang Kepailitan dan Perkembangannya (Bankruptcy Law nad Its Development), Pusat Pengkajian Hukum, Jakarta, p. 138.
- Dobrovolskiene, N. and Rima Tamošiunien. (2015). An index to measure sustainability of a business project in the ˙ construction industry: Lithuanian case. Sustainability 2015, 8, 14. https://doi.org/10.3390/su8010014 DOI: https://doi.org/10.3390/su8010014
- Gawron,Krzysztof, Alina Yakymchuk and Olena Tyvonchuk. (2019). The bankrupt entity’s assets valuation methods: Polish approach. Investment Management and Financial Innovations, 16(3), 319-331. https://doi.org/10.21511/imfi.16(3).2019.28 DOI: https://doi.org/10.21511/imfi.16(3).2019.28
- Gerstrøm, Anna and Lynn A. Isabella. (2015). Understanding Bankruptcy: How Members of a Bankrupted Bank Construe Organizational Death, Illness, Crisis & Loss Journal, 23, 2. https://doi.org/10.1177/1054137315575844 DOI: https://doi.org/10.1177/1054137315575844
- Kliestik, Tomas et. All. (2018). Bankruptcy Prevention: New Effort to Reflect on Legal and Social Changesâ€. Science and Engineering Ethics Journal, 24, 2. https://doi.org/10.1007/s11948-017-9912-4 DOI: https://doi.org/10.1007/s11948-017-9912-4
- Kozlovskyi,Serhii, Andrii Butyrskyi, Boris Poliakov, Antonina Bobkova, Ruslan Lavrov and Natalya Ivanyuta. (2019). Management and comprehensive assessment of the probability of bankruptcy of Ukrainian enterprises based on the methods of fuzzy sets theory. Problems and Perspectives in Management, 17(3), 370-381. https://doi.org/10.21511/ppm.17(3).2019.30 DOI: https://doi.org/10.21511/ppm.17(3).2019.30
- Lesmana, Rico and Rudy Surjanto. (2003).Financial Performance Analyzing. Elex Media Komputindo : Jakarta, Indonesia.
- Linna T. (2019). Insolvency proceedings from a sustainability perspective. International Insolvency Review. 2019;28:210–232. https://doi.org/10.1002/iir.1345 DOI: https://doi.org/10.1002/iir.1345
- Lusk, Harold F. (1986). Business Law: Principles and Cases, Homewood Illinois : Richard D Irwin Inc., pp. 1076-1077.
- Meher, Kishor and Henok Getaneh. (2019). Impact of determinants of the financial distress on financial sustainability of Ethiopian commercial banks. Banks and Bank Systems, 14(3), 187-201. https://doi.org/10.21511/bbs.14(3).2019.16 DOI: https://doi.org/10.21511/bbs.14(3).2019.16
- Miles, Veryl Victoria. (1996). “Assesing Modern Bankruptcy Law : An Example of Justiceâ€, Santa Clara Law Review 3, No. 4, p. 1054.
- Morrison, David. (2002). When A Company Insolvent?, Insolvency Law Journal, 10, 1.Morrison, David S. https://ssrn.com/abstract=1595085.
- Nguyen,Van Cong, Thi Nga Nguyen, Thi Tu Oanh Le and Trong Than Nguyen (2019). Determining the impact of financial performance factors on bankruptcy risk: an empirical study of listed real assets companies in Vietnam. Investment Management and Financial Innovations, 16(3), 307-318. https://doi.org/10.215 11/imfi.16(3).2019.27 DOI: https://doi.org/10.21511/imfi.16(3).2019.27
- Republic of Indonesia. (2004). Act Number 37 of 2004 concerning Bankruptcy Law.
- Republic of Indonesia. (2007). Act Number 40 of 2007 concerning Lilited Liability Company.
- Shubhan, M. Hadi. (2015). Hukum Kepailitan : Prinsip, Norma, dan Praktik Di Pengadilan (Bankruptcy Law : Principles, Regulations, and Implementations in The Court), Jakarta : Prenada Media Group.
- Shubhan, M. Hadi (2019). Misuse of Bankruptcy Petition by Creditors: TheCase of Indonesia. International Journal of Innovation, Creativity and Change. Volume 10, Issue 6.
- Wang, Ma-Ju and Heng-Ruei Shiu (2014). Research on the common characteristics of firms in financial distress into bankruptcy or recovery. Investment Management and Financial Innovations, 11(4-1).
References
kbar, Ahsan, et. All. (2019). Is Bankruptcy Risk Tied to Corporate Life-Cycle? Evidence from Pakistan, Sustainability, 11, 678. https://doi.org/10.3390/su11030678 DOI: https://doi.org/10.3390/su11030678
Al-Tawil, Tareq Na'el. (2018). Piercing the Corporate Veil: When LLCs and Corporations May at Risk, International Journal of Law and Management, 07, 0140. https://doi.org/10.1108/IJLMA-07-2018-0140 DOI: https://doi.org/10.1108/IJLMA-07-2018-0140
Beraho, Enoch K. (2008). A study of global bankruptcy trends: examples from USA, UK, Australia, Ukraine, Malaysia, and China. Problems and Perspectives in Management, 6(3).
CC. Pembatalan Homologasi. (2018). Commercial Court at the Surabaya District Court, 1, 1, 2018.
CC. PailitLeces. (2014). Commercial Court at the Surabaya District Court, 5, 2014.
CC. Pembatalan Homologasi PK. (2019). Supreme Court with the decision of a Judicial Review, Number, 2019.
CC. Medan. (2005). Commercial Court at the Medan District Court, number 02, 2005.
CC. QSAR. (2013). Commercial Court in Central Jakarta District Court, number 23, 2013,
CC. Bumi Asih. (2015). Commercial Court at the Central Jakarta District Court, Number 408, 2015.
CC. Bumi Asih 2. (2015). Commercial Court at the Central Jakarta District Court, Number 04, 2015.
CC. Bumi Asih 3. (2015). Commercial Court at the Central Jakarta District Court, Number 27, 2015.
Declercq, Peter J.M. (2002).Netherlands Insolvency Law, The Netherlands Bankruptcy Act and The Most Important Legal Concept, The Haque : T.M.C. Asser Press, p. 63. https://doi.org/10.1007/978-90-6704-533-9_1 DOI: https://doi.org/10.1007/978-90-6704-533-9_1
Djohansjah. (2004). â€Kreditor Preferen dan Separatis†(Preferred Creditor and Secured), quoted by : Emmy Yuhassarie (ed.), Undang-Undang Kepailitan dan Perkembangannya (Bankruptcy Law nad Its Development), Pusat Pengkajian Hukum, Jakarta, p. 138.
Dobrovolskiene, N. and Rima Tamošiunien. (2015). An index to measure sustainability of a business project in the ˙ construction industry: Lithuanian case. Sustainability 2015, 8, 14. https://doi.org/10.3390/su8010014 DOI: https://doi.org/10.3390/su8010014
Gawron,Krzysztof, Alina Yakymchuk and Olena Tyvonchuk. (2019). The bankrupt entity’s assets valuation methods: Polish approach. Investment Management and Financial Innovations, 16(3), 319-331. https://doi.org/10.21511/imfi.16(3).2019.28 DOI: https://doi.org/10.21511/imfi.16(3).2019.28
Gerstrøm, Anna and Lynn A. Isabella. (2015). Understanding Bankruptcy: How Members of a Bankrupted Bank Construe Organizational Death, Illness, Crisis & Loss Journal, 23, 2. https://doi.org/10.1177/1054137315575844 DOI: https://doi.org/10.1177/1054137315575844
Kliestik, Tomas et. All. (2018). Bankruptcy Prevention: New Effort to Reflect on Legal and Social Changesâ€. Science and Engineering Ethics Journal, 24, 2. https://doi.org/10.1007/s11948-017-9912-4 DOI: https://doi.org/10.1007/s11948-017-9912-4
Kozlovskyi,Serhii, Andrii Butyrskyi, Boris Poliakov, Antonina Bobkova, Ruslan Lavrov and Natalya Ivanyuta. (2019). Management and comprehensive assessment of the probability of bankruptcy of Ukrainian enterprises based on the methods of fuzzy sets theory. Problems and Perspectives in Management, 17(3), 370-381. https://doi.org/10.21511/ppm.17(3).2019.30 DOI: https://doi.org/10.21511/ppm.17(3).2019.30
Lesmana, Rico and Rudy Surjanto. (2003).Financial Performance Analyzing. Elex Media Komputindo : Jakarta, Indonesia.
Linna T. (2019). Insolvency proceedings from a sustainability perspective. International Insolvency Review. 2019;28:210–232. https://doi.org/10.1002/iir.1345 DOI: https://doi.org/10.1002/iir.1345
Lusk, Harold F. (1986). Business Law: Principles and Cases, Homewood Illinois : Richard D Irwin Inc., pp. 1076-1077.
Meher, Kishor and Henok Getaneh. (2019). Impact of determinants of the financial distress on financial sustainability of Ethiopian commercial banks. Banks and Bank Systems, 14(3), 187-201. https://doi.org/10.21511/bbs.14(3).2019.16 DOI: https://doi.org/10.21511/bbs.14(3).2019.16
Miles, Veryl Victoria. (1996). “Assesing Modern Bankruptcy Law : An Example of Justiceâ€, Santa Clara Law Review 3, No. 4, p. 1054.
Morrison, David. (2002). When A Company Insolvent?, Insolvency Law Journal, 10, 1.Morrison, David S. https://ssrn.com/abstract=1595085.
Nguyen,Van Cong, Thi Nga Nguyen, Thi Tu Oanh Le and Trong Than Nguyen (2019). Determining the impact of financial performance factors on bankruptcy risk: an empirical study of listed real assets companies in Vietnam. Investment Management and Financial Innovations, 16(3), 307-318. https://doi.org/10.215 11/imfi.16(3).2019.27 DOI: https://doi.org/10.21511/imfi.16(3).2019.27
Republic of Indonesia. (2004). Act Number 37 of 2004 concerning Bankruptcy Law.
Republic of Indonesia. (2007). Act Number 40 of 2007 concerning Lilited Liability Company.
Shubhan, M. Hadi. (2015). Hukum Kepailitan : Prinsip, Norma, dan Praktik Di Pengadilan (Bankruptcy Law : Principles, Regulations, and Implementations in The Court), Jakarta : Prenada Media Group.
Shubhan, M. Hadi (2019). Misuse of Bankruptcy Petition by Creditors: TheCase of Indonesia. International Journal of Innovation, Creativity and Change. Volume 10, Issue 6.
Wang, Ma-Ju and Heng-Ruei Shiu (2014). Research on the common characteristics of firms in financial distress into bankruptcy or recovery. Investment Management and Financial Innovations, 11(4-1).