Apindo Brings Bad News: 1,298 Companies Declared Bankrupt Due To The COVID-19 Pandemic

Illustration. (Photo: Pixabay)

JAKARTA - The Indonesian Employers' Association (Apindo) from 2020 to August 2021 as many as 1,298 companies were declared bankrupt and filed for Suspension of Debt Payment Obligations (PKPU). The reason is because the business world has been hit hard by the outbreak of the COVID-19 pandemic.

Apindo General Chair Hariyadi Sukamdani explained that amid economic uncertainty, it is estimated that bankruptcy will continue to increase. As a result, a wave of layoffs is unavoidable and the number of unemployed will increase.

"During the 2020 pandemic, the total number of Bankruptcy and PKPU cases reached 1,298 until August 2021 and is expected to continue to increase and mass bankruptcy will occur. This causes layoffs, unemployment so that it has significantly disrupted the government's efforts in National Economic Recovery (PEN)," he said. in a virtual press conference, Tuesday, September 7th.

Hariyadi said that the COVID-19 pandemic caused almost all business sectors to experience difficulties and losses in running a business. This is because cash flows make it difficult to meet debt repayment obligations.

Furthermore, Hariyadi said that many creditors, especially concurrent creditors or work partners, wanted immediate payments from debtors by filing for bankruptcy and PKPU applications.

"The trick is to file a bankruptcy and PKPU application by taking advantage of legal loopholes and weaknesses in Law No. 37 of 2004 concerning Bankruptcy and PKPU which leads to moral hazard," he explained.

Not only that, Apindo also conducts studies related to the impact of bankruptcy and PKPU on a macro basis. Hariyadi said, at a macro level, there are many companies that have added economic value if bankruptcy will cause a national emergency. Therefore, he asked the government to conduct a bankruptcy moratorium and PKPU.

Moreover, said Hariyadi, the moratorium on the bankruptcy legal process was also carried out by many countries as was also carried out by European Union countries which was summarized in 'An international guide to changes in insolvency law in response to COVID-19' which was published on December 1, 2020.

"Where each country applies a moratorium on insolvency or bankruptcy in accordance with the economic conditions of each country for a certain period of time," he said.