Indonesia's collapsed textile giant Sritex faces delisting as former executive named suspect in bank loan scandal
[JAKARTA] Indonesia's collapsed textile giant Sri Rejeki Isman (Sritex) is facing potential delisting from the Indonesia Stock Exchange (IDX) after the Attorney General's Office (AGO) named a former executive as a suspect in a corruption case involving the alleged misuse of bank loan facilities.
IDX director I Gede Nyoman Yetna said on Thursday (May 22) that Sritex shares, which have been suspended from trading since 2021, now meet the criteria for delisting and reverting to private status. However, he did not specify when the delisting would take place, saying the exchange is currently coordinating with the Financial Services Authority and a curator on the process.
'Given that Sritex has been officially declared bankrupt, management responsibilities have now been transferred to the court-appointed curator,' Nyoman said in a statement.
'Late (on) Wednesday (May 13), the Attorney General's Office named Iwan Setiawan Lukminto, who served as president director of Sritex from 2014 to 2023, as a suspect in a corruption case involving approximately 693 billion rupiah (S$54.7 million) in unsecured loans issued to the company,' said AGO spokesperson Harli Siregar.
Two other suspects were also named: Zainuddin Mappa, former chief executive officer at Bank DKI, and Dicky Syahbandinata, a former executive at Bank BJB. Bank DKI is a regional lender owned by the Jakarta provincial government, while Bank BJB is owned by the West Java and Banten provincial governments.
Abdul Qohar, director of investigation at the AGO, said corruption occurred in the disbursement of loans from several state-owned banks to Sritex, with total outstanding debt reaching 3.6 trillion rupiah as at October 2024. He said executives at the regional banks failed to conduct sufficient analysis, and did not comply with procedures and requirements.
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He noted that unsecured loans should only be granted to companies or debtors with an A credit rating, whereas Sritex had been rated BB- by Moody's.
Once a textile powerhouse in South-east Asia known for supplying global fashion giants like H&M and Zara, as well as producing uniforms for Nato, Sritex began to unravel during the pandemic. Plummeting orders pushed the company into a spiral of debt and financial distress.
The company was declared bankrupt by a court last year after failing to repay debts totalling US$1.6 billion.
The Sukoharjo, Central Java-based company halted operations on Mar 1, leading to the dismissal of over 10,000 workers, after rescue efforts initiated by President Prabowo Subianto's administration failed to yield results.
The court-appointed curator is reportedly exploring opportunities to attract investors interested in leasing Sritex's assets, as part of ongoing efforts to manage the bankrupt company's remaining resources and potentially revive its operations.
Sritex made its stock market debut on IDX in 2013, riding high on its reputation as a textile titan. The Lukminto family, which owns the company, were once among Indonesia's 50 richest, with a fortune estimated at US$515 million on Forbes' 2020 list.
Although Sritex shares have been suspended since 2021, they remain priced at 146 rupiah, giving the company a market valuation of nearly three trillion rupiah, with close to 40 per cent held by public investors.
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