Indonesia’s eFishery founder Gibran Huzaifah faces 10 years in jail after US$300 million meltdown

[JAKARTA] Indonesian prosecutors demanded a 10-year prison sentence for the founder of eFishery, who admitted to inflating revenues after his company racked up some US$300 million of investor losses to become one of South-east Asia’s biggest startup failures.During a hearing at the Bandung District Court on Wednesday (Apr 15), state prosecutors accused Gibran Huzaifah and two other executives of causing losses to the startup of more than 69 billion rupiah (S$5.1 million) and damaging investor confidence, noting the defendants showed no remorse during the proceedings. The prosecutors did not outline how they arrived at the figure.The trial marks another chapter in a spectacular fall from grace for eFishery, once heralded as the crown jewel of Indonesia’s agritech sector. The founder’s hearing is playing out in Indonesian courts almost a year after he gave Bloomberg News a detailed account of how he falsified accounts at a startup once valued north of US$1 billion. EFishery’s ultimate collapse dealt a blow to several of the world’s highest-profile investors from SoftBank Group and Temasek Holdings to Peak XV (formerly Sequoia India) and Abu Dhabi’s 42XFund. The company, which deployed feeders to fish and shrimp farmers in Indonesia, incurred several hundred million US dollars in losses between 2018 and 2024, Bloomberg News has reported. The business began unravelling after a board investigation revealed the startup may have inflated its revenue and profit over several years. The scandal triggered widespread scrutiny over regulatory oversight and due diligence standards in South-east Asia’s venture capital markets.The proposed sentence for Gibran is based on violations under the law of embezzlement in office and money laundering, prosecutors said during the hearing, which lasted less than an hour. After the session, which was sparsely attended, Gibran – who wore a white shirt – briefly met with several supporters present in court.In addition to the prison term, prosecutors are also seeking a fine of one billion rupiah. They also demanded that if the fine wasn’t paid, the defendants’ assets should be seized. If that is insufficient, an additional 190 days in jail would be imposed. The defence will present their formal plea, known as a pledoi, on Apr 22. A final verdict from the panel of judges is expected around the end of the month.Gibran’s lawyer told Bloomberg News the defence was disappointed with the prosecutors’ demands but that they respected the judicial process, arguing the case should be treated as a civil matter. He added that no evidence has been presented showing any funds flowed to his client.Prosecutors also demanded multi-year sentences and fines for former vice-presidents of the firm Angga Hadrian Raditya and Andri Yadi. Prosecutors sought a 10-year sentence and a one billion rupiah fine for Angga, the former vice-president of corporate finance and investor relations, while demanding an eight-year prison term and a one billion rupiah fine for Andri, previously the startup’s vice-president of artificial intelligence of Internet of Things. BLOOMBERG