Sritex's "Going Concern" Not Carried Out, More Than 10,000 Employees Affected by Layoffs

SEMARANG, KOMPAS — The decision of going concern or business continuity is considered impossible to be carried out in resolving the bankruptcy process of Sri Rejeki Isman Tbk or Sritex group. As a result, more than 10,000 Sritex group employees were affected by termination of employment or PHK.

The decision not to carry out a going concern was read out at a creditors' meeting held at the Semarang District Court, Central Java, on Friday (28/2/2025). The Supervisory Judge who led the meeting, Haruno Patriadi, stated that a going concern was not possible.

"We, the supervisory judge, by assessing the results submitted by the curator team and the debtor, hereby declare that going concern is impossible to implement. We are not opening a question and answer room because we have heard this together. For that reason, we have declared the going concern (option) closed," said Haruno.

The supervisory judge also declared the Sritex group insolvent. This means that Sritex is deemed unable to pay its debts. Therefore, Haruno requested that parties with specific rights coordinate with the clerk's office of the commercial court at the Semarang District Court.

Nurma Candra Yani Sadikin, one of the curatorial team members, stated that her team recommended a settlement in the bankruptcy resolution process of the Sritex group, which consists of PT Sritex, PT Sinar Pantja Djaja, PT Bitratex Industries, and PT Primayudha Mandirijaya. Nurma mentioned that this decision was made by the curatorial team after considering several factors.

"Working capital is no longer available and income is limited. Meanwhile, other costs such as monthly electricity bills and excessive employee burdens cannot be covered by the debtor's business operations, so it has the potential to harm the bankrupt's assets if going concern is carried out," said Nurma.

After the settlement option is decided, the curator team will appoint an independent Public Appraisal Service Office (KJPP) to conduct an appraisal or assessment of the bankrupt's assets. Furthermore, the results of the assessment are reported to the supervising judge and then registered for auction through the State Asset and Auction Service Office.

"We have data in 2023, the value of Sritex assets is approximately IDR 10 trillion. But that is the value in 2023. Whether that value can be assessed the same by the KJJP that we appointed, we don't know yet. That is also still being assessed by the market, not the liquidation value," said Denny Ardiansyah from the curator team.

According to Denny, his party has not yet determined whether the bankrupt assets owned by Sritex are sufficient to pay the company's debt of approximately Rp 28 trillion. Moving forward, the curator team will further investigate to identify whether there are other assets that have not yet been recorded. In addition to paying debts to creditors, the auctioned assets of Sritex will also be used to fulfill the rights of Sritex employees.

Meanwhile, Director of PT Sritex Iwan Kurniawan Lukminto said that his party respects the insolvency decision and the absence of a going concern. In the future, his party admitted that it would cooperate with the curator team to facilitate the settlement process.

"We also do not forget to support our entire extended family, our employees, so that their rights can be fulfilled in the future. At Sritex alone, there are approximately 8,000 employees, and when combined with (three other companies), the total might be around 12,000 people," said Iwan.

According to Iwan, the operations of the Sritex group officially ceased on Saturday (1/3/2025) after 21,382 days or approximately 58 years of operation. Nevertheless, several employees had already begun to be laid off by the curator team starting Wednesday (26/2/2025).

Slamet Kaswanto, representative of the Confederation of Indonesian Workers Unions Sritex Group said, layoffs are a scary decision for employees. Because, so far they have wanted a going concern so that their work continuity can be guaranteed.

"Layoffs are very scary for us because we will lose income, lose jobs. However, today after being decided like that, of course we respect the law that is currently running because our country is a country of law. We will continue to try to fight for the rights of our colleagues, the workers of the Sritek group, so that they can be fulfilled as well as possible," said Slamet.

Slamet added that Sritex workers affected by layoffs hope they can return to work in the textile business sector. This is because those are the skills they have. To be able to switch to another business sector, it takes time to learn. In fact, they want to be able to work immediately so they can make ends meet.

"The government has offered job vacancies and will provide job training centers, but we do not yet know what sector it is and whether it is in accordance with the skills of the employees. Moreover, the average age of these employees is less productive, approaching the age of 50 years, if they have to be trained at the BLK first, it will be difficult," he added.

Head of the Central Java Manpower and Transmigration Agency Ahmad Aziz noted that the layoffs at the Sritex group affected 10,965 people. For that, the government will help provide jobs for those affected.

"The Sukoharjo Regency Government has prepared job vacancies for around 8,600 people. If (Sritex employees) who are laid off want to work, they can apply for the vacancies. Including, we also ask for (leniency) related to (age) requirements. Those companies can accept employees up to 45 years old, because they are considered to have experience," said Aziz.

In addition, Aziz also said that the government will oversee so that Sritex group employees affected by layoffs can get their rights, such as old age security and job loss security from the Social Security Administration for Employment. In addition, Aziz also hopes that the rights in the form of severance pay and holiday allowances (THR) for them can be fulfilled.

"Severance pay and THR are owed. They will be paid when the curator has the money to pay the obligations," he said.