Jakarta, Indonesia Sentinel — PT Sri Rejeki Isman Tbk (SRIL) widely known as Sritex, has been declared bankrupt by the Commercial Court of Semarang, under case number 2/Pdt.Sus-Homologasi/2024/PN Niaga Smg. The decision has raised concerns about the fate of around 20,000 workers and the future of the company.
Said Iqbal, President of the Indonesian Trade Union Confederation (KSPI) and the Labor Party, emphasized that Sritex’s bankruptcy is not due to wage policies but rather the company’s difficulty in repaying its debts.
“Sritex went bankrupt not because of wages, but because they couldn’t manage their debt. When companies are struggling, they complain, but when they’re making a profit, they don’t share it with the workers,” Iqbal remarked at a press conference in Jakarta on Thursday, October 24, 2024.
Iqbal argued that increasing wages could help companies avoid bankruptcy by boosting workers’ purchasing power. “Raising wages will increase purchasing power, which, in turn, could help sell the company’s products and keep the economy moving. That’s what countries like Japan and Brazil did during their economic crises,” he added.
Sritex, a textile powerhouse, is facing a total liability of $1.6 billion (Rp 24.66 trillion) as of September 2022, largely stemming from interest-bearing loans and bonds. The company’s debt crisis has now left thousands of workers on the brink of losing their jobs without severance pay.
Iqbal vowed to take legal action if workers do not receive severance compensation. “If they fail to pay severance, we will sue. We’ll take this to court if necessary,” he said, urging the government to intervene.
Indonesian Textile Leader Sritex Declared Bankrupt, $1.6 Billion Debt Crisis
Meanwhile, Ristadi, President of the Nusantara Trade Union Confederation (KSPN), revealed that Sritex is currently preparing to file an appeal against the bankruptcy ruling. “The company is likely to file an appeal. Hopefully, the decision will be overturned, as 20,000 workers are at risk of losing their jobs without any severance,” Ristadi told CNBC.
Before its collapse, Sritex had a history of struggling with debt management, eventually leading to its downfall. Despite multiple efforts by the Lukminto family, which has led the company for decades, Sritex could not overcome its financial burdens.
(Becky)
