In late June, an Indonesian government committee called experts to testify in a probe involving one of Asia’s biggest super apps: national tech champion GoTo Group. The probe, which is investigating relationships between officials at GoTo and a unit of state-owned giant Telkom, has gathered momentum over recent weeks.
“First, the commission wants to ascertain whether the investment was indeed a necessity for Telkomsel in developing its business, including what benefits Telkomsel would get from it,” House of Representatives (DPR) commission deputy Muhammad Sarmuji, who is leading the working committee, told Rest of World. “Second, whether the investment is in accordance with good corporate governance, including whether there is a conflict of interest.”
Some legal experts see the probe as a passing storm that’s being politicized by government critics; activists are hoping for a moment of accountability over the snug relations between Indonesia’s tech industry and officials.
The sequence of events kicked off in May, when sharp-eyed observers noticed a nearly $60 million unrealized loss in Telkom’s accounts. It stemmed from a $450 million investment by subsidiary Telkomsel into Gojek over 2020 and 2021, which, the following year, would become part of the super-app giant GoTo Group. GoTo’s listing on the Indonesian Stock Exchange in April was highly-anticipated — and a crowning moment for the blockbuster merger between Gojek and Tokopedia, two of Indonesia’s most successful tech ventures.
Indonesian social media began to buzz, pointing out high-ranking connections between the two companies. Garibaldi Thohir, an industrialist who was promoted to GoTo’s president commissioner the year after the Telkomsel investment, is the brother of the minister of state-owned enterprises, Erick Thohir — the highest authority for state-owned firms like Telkom. Over 2020 and 2021, two people at GoTo’s legal consultancy were given positions on Telkom’s commissioner board. One, Bono Daru Adji, was eventually appointed chair of the telecomm’s audit committee. Separately, another active commissioner of Tokopedia was simultaneously president commissioner of Telkomsel.
“How come the merger legal consultant, IPO legal consultant, the commissioner of Telkom, and chairman of the audit committee are [all] from the same group of people? Is there no conflict of interest there?” Agustinus Edy Kristianto, a legal activist, wrote in a highly-shared Facebook post.
Economist and journalist Yanuar Rizky told BBC News Indonesia that the connection between these people suggests a deal that was “outside of the norm.” The $450 million investment from Telkomsel was made through a convertible bond with no annual interest bearing, along with a share agreement worth an additional $300 million, which Rizky said was unusually favorable for Gojek.
Experts told Rest of World that, as of now, the probe seems to be a formality, intended to answer concerns circulating on social media. As Indonesia approaches a 2024 presidential election, political opponents of the ambitious Erick Thohir may be tempted to use the case against him. Local media covering the investigation have used words like “corruption” and “nepotism,” while the government has tread more lightly, wary of politicizing the company’s strife.
It’s not unusual for people affiliated with public officials to hold high-up positions in private companies in coal, palm oil, and other commodities, but a government probe is less common. It’s unclear what the consequences of the probe could be for Telkomsel or GoTo. Observers told Rest of World that while there are perceived irregularities, the argument built for conflict of interest and nepotism is still weak.
“There are no laws in Indonesia that prohibit relatives of public officials from holding important positions in private companies,” said one director of a state-owned venture capital arm, who requested anonymity due to the sensitivity of the issue. Therefore, he believed, there should be no legal implications, especially if there’s no indication that the investment is detrimental to the state’s budget. Telkomsel, although 65%-owned by Telkom, is by definition a private company, not a state-owned firm like its parent, he added.
“Maybe not nepotism, but more like our government, via Telkom, tried to scratch each other’s back with GoTo,” he told Rest of World.
Observers expect the investigation to be a slow burn. Achmad Baidowi, a DPR committee member, told Rest of World that the committee will continue to summon involved parties, including representatives from GoTo and the Ministry of State-Owned Enterprise, over the next two or three months. At the end of the process, the committee will present its findings to DPR leaders, who will then forward them to the government.
“The government will be the one who takes the next step,” Baidowi said. “But we don’t want to get ahead of ourselves. Let us carry out the current process first,” he added.
