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Bad Business Practice or Shareholders’ Dispute?

Raid on Sky Garden Discotheque for Not Holding Proper Operating License Instigated by ‘New’ Shareholders Against ‘Old’ Shareholders.

Despite reports that the Badung Regency Satpol PP (enforcement agency) has issued a “first warning letter” and ordered the closure of the Sky Garden Discotheque in Legian for its failure to renew its operating license, the popular night spot continues to operate, conducting business as usual.

Confirming suspicions that more may be at play than simple tardiness in renewing its operating permit, the closure notice has precipitated public comment by a “new” shareholder in the business, I Gusti Agung Ngurah Agung. Agung, accompanied by two lawyers, admitted to the press that the operating permit for The Sky Garden expired on January 16, 2019.  Agung blamed the failure to renew the license on the “old” shareholders failure to supply copies of land leases, fueling claims that the old shareholder may be committing an act of fraud against the “new shareholders.”

Quoted by Balipost.com, Agung said, “At this time there is an ongoing change in shareholder at PT ESC (Sky Garden), but there has been no change in management.” Continuing, Agung claims the “old” shareholders have failed to surrender legal documentation including operating permits and licenses, taxation receipts, financial reports, and the company’s books.

Agung said he would soon convene a shareholders meeting, but also confirmed the new shareholders had precipitated the recent raid by reporting the missing licenses to the Badung enforcement agency (Satpol PP) requesting the company be closed.

To permit the company to continue to do business, the “new” owners are moving ahead and renewing licenses on their own accord, paying past debt amounting to Rp. 45 billion to debtors, and reorganizing the internal management of the company. Agung’s legal team said there are suspicions that the “old owners” have left unpaid tax bills amounting to Rp. 9 billion.

Agung said the “new” shareholders are reorganizing the company, addressing the debt situation, and ensuring taxes are paid in order to protect the jobs of some 600 employees.

A director of the Sky Garden, Daniar Tri Sasongko, confirmed to the press that the Sky Garden closed very briefly after receiving a written warning from the Regency, but had now re-opened for business despite the required licenses still out f date and unrenewed,

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