Replacement of Members of the Board of Directors of a State-Owned Enterprise During the Suspension of Debt Payment Obligations: Implications for Composition Efforts in Light of the Going Concern Principle

Andzar Ibrahim (Universitas Padjadjaran)

Journal of Law, Poliitic and Humanities
Vol. 6 No. 5 (2026): (JLPH) Journal of Law, Politic and Humanities

Abstract: The restructuring of financially distressed Indonesian state-owned enterprises (SOEs) through the Suspension of Debt Payment Obligations (Penundaan Kewajiban Pembayaran Utang or PKPU) rests on a co-management mechanism under Article 240 of Law Number 37 of 2004, in which the debtor's Board of Directors manages the estate jointly with a court-appointed Administrator. In practice, however, the Minister of SOEs, acting as the General Meeting of Shareholders, has replaced members of the Board of Directors while PKPU proceedings were ongoing, a situation that none of the Indonesian bankruptcy, company, or SOE statutes anticipates. This study examines how such replacement affects the performance of the Administrator's duties and authority, and what its implications are for composition efforts in light of the going concern principle. Using a normative juridical method with a descriptive-analytical specification, the study analyzes statutory provisions, doctrine, and two contrasting cases: PT Barata Indonesia (Persero), whose President Director was replaced sixteen to seventeen days after the provisional PKPU decision, and PT Garuda Indonesia (Persero) Tbk, which preserved its President Director throughout the proceedings. The study finds that a mid-PKPU replacement of directors generates five categories of consequences for the Administrator, namely informational, administrative, substantive, coordinative, and regulatory consequences, while the Administrator possesses no authority to object to the shareholder's decision and can only rely on supervisory and repressive instruments under Articles 240, 234, and 255. The comparison further shows that director replacement is a double-edged sword for composition: partial, well-timed replacement supported continuity and successful plan execution in Garuda, whereas early wholesale replacement in Barata was followed by post-homologation default and a new bankruptcy petition. The study recommends that the SOE regulator postpone director replacement during PKPU and issue implementing regulations governing SOE management in PKPU to close the existing legal vacuum. Keyword: Suspension of Debt Payment Obligations, Administrator, Board of Directors, State-Owned Enterprise, Going Concern.