The Financial Reporting Council (FRC) and institutional bodies have published the following guidance in relation to corporate governance and directors' remuneration in the last few months.

Introduction

The giants of Asia – Indonesia, China, and India – raise many opportunities and challenges for insolvency practitioners. Baker McKenzie’s own Andi Kadir spoke this morning about some of the solutions to those problems, showcasing his significant experience with insolvency reforms and opportunities in Indonesia.

Andi highlighted the benefits of the Penundaan Kewajiban Pembayaran Utang regime as a restructuring tool in Indonesia. A PKPU is a debtor in possession mechanism, somewhat like a blend of a US Chapter 11 administration with aspects of the insolvency laws of the Netherlands.

Indonesia’s Financial Services Authority (OJK) has updated public companies’ disclosure obligations concerning bankruptcy. The regulations create a new sanctions regime for non-compliance that improves the OJK’s enforcement capacity. The changes are relevant to investors and others with an interest in Indonesia’s capital markets. They came into effect on 22 June 2017.

Global Restructuring Review is a leading source of news and insight on cross-border restructuring and insolvency law and practice, read by international lawyers, insolvency practitioners and accountants, judges, corporate counsel, investors and ac

In Heince Tombak Simanjuntak & Ors v Paulus Tannos & Ors (2019), the Singapore High Court granted recognition of Indonesian bankruptcy orders made against the four respondents, each of whom is an Indonesian citizen. This allows the applicants to administer the respondents’ property in Singapore. The case provides banks with the assurance that bankruptcy orders obtained in Indonesia may be enforced in Singapore.

Six days into 2020, the Indonesian Constitutional Court (“Constitutional Court”) began the New Year with a bang, issuing a decision that is not likely to be received well in loan markets.

The Constitutional Court has decided in favour of two petitioners (a married couple) and effectively changed the interpretation of Article 15(2) and (3) of the Fiducia Law (Law No. 42 of 1999), striking at the core principles of that law (“Constitutional Court Decision”).

Supreme Court issued guidelines on bankruptcy and suspension of debt repayment – you might want to rethink your options.

The highest judiciary authority in Indonesia, the Supreme Court (Mahkamah Agung, MA), recently issued MA Decree No. 3/KMA/SK/I/2020 on the Guidelines on the Handling of Bankruptcy and Suspension of Debt Payment Proceedings (the Guideline). This Guideline sets out, among others:

The Indonesian Supreme Court has provided guidance on the availability of the key restructuring process in Indonesia – the examination process of a suspension of payment or restructuring (Penundaan Kewajiban Pembayaran Utang or PKPU). The guidance comes amidst a challenging economic climate and limits the remedies available to secured creditors by preventing secured creditors from initiating a PKPU.

PKPU as a Restructuring Channel

Indonesia has had a bankruptcy law since 1905, when Staatsblad 1905 No. 217 juncto Staatsblad 1906 No. 348 Concerning Bankruptcy was enacted. In response to the 1997-98 Asian financial crisis, and the view that the 1905 bankruptcy law was out of date and irrelevant to modern commercial needs, the Government on April 22, 1998, issued Government Regulation in Lieu of Law No. 1 of 1998 regarding Amendments to the Bankruptcy Law. GR 1/1998 was adopted as Law No. 4 of 1998 on September 9, 1998. Law No. 4 of 1998 was eventually revoked by Law No.