2024 ended with DealStreetAsia’s explosive news break that shook up the Indonesian startup industry — eFishery’s board had suspended its co-founders Gibran Huzaifah and Chrisna Aditya following an investigation into alleged financial irregularities at the company.
The alleged fraud is understood to date back to 2018 when the aquatech startup was raising its Series A round, according to several sources familiar with the matter.
Initial findings by a global firm hired to conduct a forensic audit on eFishery reveal a complex scheme of alleged financial manipulation involving dual financial reporting, setting up of nominee companies, and fabricated transactions that purportedly inflated the company’s revenue and profit figures for years, the sources mentioned above said.
The firm is understood to have interviewed dozens of eFishery’s employees and obtained certain documents for the investigation. DealStreetAsia has been made aware of the auditing process and the preliminary findings, which are corroborated by multiple investors.
According to multiple sources mentioned above, Gibran Huzaifah, eFishery’s ex-CEO, is said to have allegedly created and maintained two sets of accounting books from 2018, when the firm was seeking to raise around $4 million in its Series A round.
To meet the Series A fundraising target, Huzaifah allegedly decided to inflate the company’s revenue by 20-25% to attract investors.
Per the company’s announcement on Nov 13, 2018, it was able to gather $4 million in Series A funding from Aqua-Spark and Indonesian VC Ideosource, both existing investors who have backed the firm since its seed round in 2015. The Series A round was joined by Maloekoe Ventures, Social Capital, Unreasonable Capital, Triputra Group, 500 Durians, and Wavemaker Partners.
For two years, Gibran himself allegedly created and maintained the two sets of books. One set of books was presented to external parties, while the internal books were maintained on eFishery’s enterprise resource planning (ERP) system.
In August 2020, Angga Hadrian Raditya, the VP of Corporate Finance & Investor Relations, was hired and allegedly tasked to maintain the inflated records. In January 2021, Tubagus Tommy Apriadi joined as Head of Financial Controller and is believed to have oversight of the actual books. Finally, Wirabhama Kirana, Head of Corporate Planning, was appointed by the end of 2021 and allegedly took charge of maintaining the external books.
The arrangement is understood to have become shaky after the company migrated its ERP system in 2021. The ERP system reflected the actual accounts, while inflated records were maintained on separate spreadsheets.
Monthly targets for revenue and profit were set by leadership, and adjustments were allegedly made within the ERP system to reflect these goals. Supporting documentation, such as invoices and contracts, were allegedly created to ensure consistency in financial reporting.
Northstar Group, one of eFishery’s investors, declined to comment on the story. DealStreetAsia has also reached out to eFishery’s largest investor, Aqua-Spark, as well as the company itself. Additionally, DealStreetAsia has contacted several senior employees, including Gibran Huzaifah, Angga Raditya, and Tubagus Tommy Apriadi, whose alleged roles in the fraudulent activities are being investigated.
‘Round-tripping’
As the gap between real and supposedly fictitious revenues widened, eFishery’s ex-CEO incorporated five companies in January 2022 to allegedly enable the roundtripping of funds to support the flow of money for fraudulent transactions, the sources mentioned above said.
Round-tripping refers to the transfer of money or assets from one party to another and then returned to the original party through a series of transactions.
The five firms that were created for the purpose were PT Indonusa Indika Pratama, PT Dua Lima Global Utama, PT Inti Sarana Teknonusa Jaya, PT Sentra Agri Nusapertama, and PT Integra Makmur Agridaya.
These entities helped optimise fund flows between eFishery’s operational arms — PT Multidaya Teknologi Nusantara (MTN), PT eFishery Aquaculture Indonesia (EAI), and PT Teknologi Untuk Pembudidaya (TUP).
Funds were allegedly directed through these entities to address operational costs and revenue recognition, among others. Additionally, credit facilities from established banks were tapped to enhance liquidity and support business activities.
Raditya and Kirana allegedly even obtained interest income from the bank accounts of the five shell companies.
According to sources, to further inflate its financial performance, eFishery allegedly engaged in transactions with two entities: CV Andalan Trading Mina (ATM) and PT Karya Terbesar Jatoychin (Kateja). ATM, listed as a customer, was allegedly used to inflate revenue, while Kateja, identified as a supplier, was said to be used to inflate the cost of goods sold.
According to sources, Huzaifah also allegedly overstated capital expenditure figures, which not only misled stakeholders about the company’s financial health but also helped justify its declining cash position.
Series D brings concerns to light
eFishery’s financial issues and challenges came to the fore around the time of its Series D fundraising in July 2023 — a seminal moment when the startup achieved the much-coveted unicorn moniker.
For a company struggling to raise $4 million in 2018, eFishery secured $200 million from Abu Dhabi-based fund manager 42XFund at a valuation of $1.33 billion five years later.
While the funds were intended to support its growth plans, they were allegedly not fully utilised. Sources said that initial findings highlight several areas of potential misuse amounting to approximately $200 million.
After raising $200 million in a Series D funding round led by Abu Dhabi-based global fund manager 42XFund, eFishery entered the coveted unicorn club with a valuation of around $1.33 billion.
In 2022, eFishery raised $90 million in its Series C round co-led by Singapore state investor Temasek, SoftBank Vision Fund 2, and Sequoia Capital India.
Other prominent investors in the firm include Northstar, Wavemaker Partners, Argor Capital, and SoftBank. In May this year, the firm also secured a $30-million green and social loan from HSBC Indonesia for its expansion plans.
Top Shareholders of eFishery
Source: DealStreetAsia’s DATA VANTAGE
By late 2024, the gap between eFishery’s actual and allegedly inflated performance had grown too wide to go unnoticed, leading to whistleblower allegations and subsequent investigations. This whistleblower, a former senior employee with access to the company’s financial systems and records, became the catalyst for exposing the real situation behind Indonesia’s celebrated unicorn.
Investors immediately took action by suspending Huzaifah and Chrisna Aditya from their positions in a matter of a day. The company’s leadership is under interim CEO Adhy Wibisono and interim CFO Albertus Sasmitra.
