LOSS IS NOT LIMITED TO THE RESPONSIBILITY OF THE LIMITED LIABILITY COMPANY ONLY BUT ALSO THE MANAGEMENT (PIERCING THE CORPORATE VEIL)
The bank provides credit loans in large amounts to the Limited Liability Company (PT) included in the bank group, where the process of granting this credit turns out to have:
- No credit analysis
- Land as collateral, the validity period of the right to build (HGB) is known to have expired.
- The management of the bank is the same person as the management of the PT who received the credit.
There is a strong suspicion that there has been a conspiracy and bad intentions to harm third parties. The credit was then stuck because the PT could not pay its debts. In dealing with this case, the legal theory of Piercing the Corporate Veil or Extension de passip (lifting the Corporate veil), namely, when the loss is not limited to the PT itself, it extends to include and become the personal responsibility of the management jointly and severally.
→ Supreme Court Decision No. 1916K/Pdt/1991, 28 August 1996.
Source: Compilation of Supreme Court Abstract Legal Decisions on the Law of Debts and Receivables, By: Ali Boediarto, S.H. Publisher: Indonesian Judges Association, page 385.
Best regards,
Fredrik J. Pinakunary