Preliminary findings from a forensic audit on alleged financial fraud by the founders and former top executives of the Indonesian aquaculture firm eFishery reveal that the misconduct was extensive and carried out in a systematic manner.
The findings, made available to DealStreetAsia through sources and confirmed by multiple eFishery shareholders, show that the company’s top management—before it was reshuffled in December—had inflated its revenue for the first nine months of 2024 by nearly fivefold and manipulated its bottom line to appear profitable despite posting massive losses.
As previously reported, the management had been maintaining two sets of accounting records since at least 2018, one for select company leadership and another for external use, including for shareholders, banks and auditors, creating a misleading narrative on the financial trajectory of the company.
The internal accounting reveals that the company generated 2.6 trillion rupiah (approx. $161 million) in revenue between January and September 2024, while the external record overstated this figure by 4.8 times, reporting 12.3 trillion rupiah ($750 million). This level of revenue inflation far exceeds previous years, where external figures were inflated by 1.8x in 2023, 1.4x in 2022, and 1.7x in 2021.
Based on inflated revenue, the external accounting for the first nine months reports a pre-tax profit of 261 billion rupiah ($16 million), in sharp contrast to internal records, which show a loss of 578 billion rupiah ($35 million). The preliminary findings concluded that since the start of eFishery’s business in Indonesia until the end of November last year, the company had retained losses of approximately $152 million.
Despite the company operating at a loss, the annual employee bonus pool was calculated using the inflated financial figures. This resulted in 24.4 billion rupiah ($1.5 million) being disbursed in bonuses for 2023 performance, up by 98.4% relative to the previous year.
It is important to note that the scope of the forensic audit only covers the operations of three eFishery’s Indonesian arms: PT Multidaya Teknologi Nusantara (MTN), PT eFishery Aquaculture Indonesia (EAI), and PT Teknologi Untuk Pembudidaya (TUP). Unaudited entities include holding company eFishery Pte. Ltd, eFishery America Inc., eFishery Aqua Techworks Private Limited, and the company’s non-profit foundation Yayasan eFishery Tumbuh Bersama Pembudidaya.
