Heaptalk, Jakarta — Indonesia’s Financial Services Authority (OJK) has officially revoked the business license of P2P startup Investree following the Decision of the OJK Board of Commissioners Number KEP-53/D.06/2024 on October 21st, 2024.
According to Ismail Riyadi, the Acting Head of the Literacy, Financial Inclusion, and Communication Department of OJK, this revocation was primarily driven by Investree’s negligence in fulfilling the minimum equity requirements and other regulations stipulated in OJK’s Policy Number 10/POJK.05/2022 on Information Technology-based Lending Services (LPBBTI).
“Additionally, the startup’s deteriorating business performance impacted its operations and services, resulting in significant concerns for customer protection. We aim to ensure LPBBTI operators retain integrity, uphold good governance, and implement robust risk management systems to safeguard public interests and customer protection,” Ismail conveyed.
With the revocation of its business license, OJK advised Investree to execute multiple matters, covering:
- Cease All Business Activities: Investree must stop all operations related to its role as an Information Technology-Based Lending Services (LPBBTI) provider, except for obligations under the law, such as tax compliance.
- Asset Protection: Shareholders, management, employees, and related parties are prohibited from transferring, pledging, mortgaging, using, obscuring records of the company’s assets, or taking any actions that could reduce or diminish the value of the company’s assets, except when necessary for fulfilling legal obligations.
- Settle Employee Rights: Investree must settle all employee rights following applicable labor laws.
- Fulfill Obligations to Stakeholders: Investree must address its obligations to lenders, borrowers, or other related parties in compliance with legal requirements.
- Provide Clear Information: The company must provide clear information to lenders, borrowers, and other relevant parties regarding settling rights and obligations.
- Hold an Extraordinary General Meeting (AGM): Investree must organize an AGM meeting within 30 calendar days of the license revocation to establish a liquidation team and initiate the dissolution of the company’s legal entity.
- Establish a Customer Service Center: The company must prepare an information and customer complaint center and appoint a responsible person to handle public inquiries and complaints.
The country’s financial institution had previously directed Investree’s management and shareholders to fulfill the minimum equity requirements, seek credible strategic investors, and take corrective measures to improve performance and comply with existing regulations. The regulator also urged Investree’s ultimate beneficial owners (UBO) to participate in these measures.
This fintech startup was reportedly experiencing a lousy credit issue as of last year. Investree’s bad credit ratio (TWP90) was observed to reach 12.8% last January and continued to rise to 16.44% in early June 2024. Meanwhile, the bad credit ratio for fintech companies in Indonesia must be maintained at a maximum of 5% following regulations.
The problem was getting more complex due to Investree’s CEO, Adrian Gunadi, dismissal from the board, effective January 31st, 2024. He previously admitted to diverting Investree’s funds to a personal account. He used his position as director to make the startup the guarantor for an individual company, which also affected the turmoil.
