Family of top Indonesian magnate owns 51% in ShopeePay, and that makes all the difference

Photo: Sea Ltd website

The family of Indonesian billionaire Martua Sitorus, the co-founder of the world’s biggest palm oil trader Wilmar International, is the controlling shareholder in ShopeePay, the Indonesian e-payment arm of Singapore-based Sea Ltd, showed an examination of the latest corporate filings in the country by DealStreetAsia.

While Sea’s partnership with the Sitorus family is, in part, to comply with Bank Indonesia’s 51% domestic ownership requirement for e-money licence holders, the ties with an influential, well-networked family is also an important factor for Sea in achieving its fintech ambitions in Indonesia, the largest and the most complex consumer market in Southeast Asia.

The Sitorus family controls 51.1% in ShopeePay, the trademark of PT Airpay International Indonesia, through PT Indigo Trading. Sitorus’ daughter Jacqueline Sitorus and nephew Andy Indigo, are the ultimate beneficial owners of Indigo Trading, through multiple entities, the corporate filings show.

Sea’s interest in ShopeePay, meanwhile, is held by its subsidiary SeaMoney Ltd. which owns 48.89%, and co-founder Gang Ye who owns 0.01%.

Expand Table

Who owns ShopeePay?

ShareholderStake
Indigo Trading (owned by Sitorus family)51.1%
SeaMoney Ltd.48.89%
Gang Ye (Sea co-founder)0.01%

The partnership with the Sitorus family also extends to the control of PT Bank Kesejahteraan Ekonomi, better known as Bank BKE, which is believed to be Sea’s gateway to Indonesia’s digital banking sector.

DealStreetAsia had reported on Sea Group’s acquisition of the owners of Bank BKE — PT Danadipa Artha Indonesia (which has a 94.95% stake) and by PT Koin Investama Nusantara (5.05%) — earlier this month.

Sea’s subsidiary Turbo Cash Hong Kong Ltd holds 82.19% stake in Danadipa, while the remaining is held by PT Danatek Gemilang Perkasa, which is wholly-owned by Jacqueline Sitorus. Turbo Cash also controls 66.67% of Koin Investama, while Andy Indigo holds the rest.

Sea declined to comment when contacted by DealStreetAsia.

Friends in high places

Sitorus, who co-founded Wilmar in 1991, ranks 12th in Forbes Indonesia’s rich list with an estimated wealth of $2.1 billion. Apart from the Singapore Exchange-listed Wilmar, his wealth also comes from Gama Group, which he co-founded in 2011 with his brother Ganda, who goes by one name. Gama’s business interests include palm oil, cement production, property, and, more recently, infrastructure development.

Sitorus no longer holds a position in Wilmar after resigning as non-executive director in July 2018 following a report by Greenpeace International that accused Gama of deforestation. Ganda’s son Darwin Indigo — Andy Indigo’s elder sibling —  currently serves as Wilmar’s country head for Indonesia.

The Sitorus family, however, is not Sea’s only link to Wilmar. Gang Ye, who joined fellow Sea co-founder Forrest Li in Forbes’s world billionaire list in 2019, was a former employee at the company.

Sea’s independent director Kuok Khoon Hua also serves as the non-executive director at Wilmar. Kuok, who is the son of Malaysia’s richest businessman Robert Kuok, is an early investor in Sea and so is his second-cousin, Wilmar CEO and co-founder Kuok Khoon Hong, through his family’s investment vehicle, HPRY Holdings Ltd.

Having a trusted local partner that has an extensive business network and formidable influence is an important asset for Sea in navigating Indonesia, which was ranked as the most complex place to do business in 2020 in the Global Business Complexity Index by Amsterdam-based professional services firm TMF Group.

The backing of the Sitorus family also complements the presence of Pandu Patria Sjahrir as chairman at ShopeePay and Sea’s e-commerce unit Shopee Indonesia. Sjahrir, one of Indonesia’s best-known tech investors, is an investor in Sea and a personal friend to the company’s co-founder Li, who was his senior at Stanford University’s MBA programme.

Sjahrir holds several high-profile positions in Indonesia’s business community. He is the commissioner of Indonesia Stock Exchange, the chairman of Indonesian Coal Mining Association, and a candidate to lead Indonesia’s $20 billion state investment fund, Indonesia Investment Authority.

Luhut Binsar Panjaitan, Sjahrir’s uncle, is heavily involved in setting up the fund in his capacity as Indonesia’s coordinating minister for Maritime Affairs and Investment. The retired army general is one of the most powerful figures in President Joko Widodo’s administration as well as in the country’s second-largest political party, Golkar.

Regulatory overhaul

A regulatory overhaul by Bank Indonesia and the Financial Services Authority (OJK) is expected to trigger more synergies between e-payment apps and their affiliated banks this year in their effort to provide a seamless digital banking experience.

Apart from Shopee and Bank BKE, other notable pairings include Gojek’s GoPay and Bank Jago, as well as Salim Group’s iSaku and Bank Ina.

While the OJK is still drafting its digital bank regulation, the central bank has unveiled an umbrella regulation that will reclassify existing e-payment providers based on a set of new licences and categories starting July 1. At present, all e-payment firms operate under e-money and QR-Code Indonesia Standard (QRIS) licences.

More importantly, the regulation will require all non-bank payment services providers to have at least 15% shares and 51% of voting rights controlled by Indonesians or domestic firms. Existing e-payment companies will be given two years to comply.

It remains unclear whether the ownership limits refer to immediate or ultimate shareholders, as implementing regulations are poised to be published in the coming weeks and months. As a reference, the 49% foreign ownership cap for e-money licence holders only refers to immediate shareholders.

If the regulation does refer to ultimate shareholders, the Sitorus family’s majority ownership in ShopeePay should meet the ownership requirement. Filings also suggest competitors such as DANA and LinkAja would pass the threshold.

The potential regulatory impact on GoPay and OVO is rather ambiguous due to their more complex share ownership and voting right classifications as well as a far more dominant foreign ownership in their parent companies, as discussed and analysed in detail in DealStreetAsia’s Research & Analytics reports.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.