EFishery Pte, a prominent Indonesian agritech startup, is facing allegations of inflating its revenue and profit figures by hundreds of millions of dollars over several years. An internal investigation triggered by a whistleblower's complaint revealed potential financial irregularities, raising questions about the company's financial health and its impact on the Indonesian startup ecosystem.
EFishery Pte, a prominent Indonesia n startup, is facing allegations of revenue and profit inflation spanning several years. An internal investigation, triggered by a whistleblower's claims about the company's accounting practices, estimates that management inflated revenue by almost $600 million in the nine months through September 2024. This would represent over 75 percent of the reported figures being fabricated. The agritech startup, backed by investors including SoftBank Group Corp.
and Temasek Holdings Pte, had been lauded for its profitability in a time of economic uncertainty in the tech sector. EFishery, which provides smart feeding devices and feed to fish and shrimp farmers in Indonesia, aimed to modernize the country's fish industry and presented a $16 million profit for the first nine months of 2024 to investors. However, the investigation alleges that the firm actually incurred a $35.4 million loss during this period. The investigation further indicates that revenue for the period was estimated at $157 million, significantly lower than the $752 million reported to investors. The report also suggests that management inflated revenue and profit figures for several previous years. The investigation was initiated after a whistleblower alerted a board member to discrepancies in the company's financial records. Subsequently, the board commissioned a formal investigation in December 2024, leading to the dismissal of co-founder and CEO Gibran Huzaifah. While the report, authored by FTI Consulting, is a draft and subject to further changes, it is based on over 20 interviews with company staff and reviews of communications across various platforms, including WhatsApp, Slack, and others. The draft report acknowledges that investigators have yet to interview auditors or review any audit workpapers or documentation. The numbers are expected to evolve as further investigations are conducted, including reviewing bank statements and completing pending interviews. This alleged fraud has sent shockwaves through the Indonesian startup ecosystem, particularly given the protective measures in place, including channel checks and exit interviews of staff. EFishery had previously engaged PricewaterhouseCoopers and Grant Thornton to audit its financial results. However, the two accounting firms declined to comment on the allegations. This situation raises significant concerns about the integrity of financial reporting within the Indonesian startup landscape and the potential implications for investors and the broader economy
Efishery Indonesia Startup Fraud Revenue Inflation Profit Inflation Whistleblower Agritech Investment Softbank Temasek Financial Misconduct
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