eFishery, an Indonesian-based aquaculture startup, is facing a major fraud investigation after allegations surfaced that the company inflated its financial reports, potentially misrepresenting its revenue by up to $600 million (approximately Rp 9.8 trillion) quoting from Katadata.co.id.

The claims center around discrepancies in the company’s financial statements for the period between January and September 2024. The reports presented to investors included significant overstatements.

The company had reported a profit of $16 million (Rp 261.3 billion) and total revenue of $752 million (Rp 12.3 trillion), while, in reality, eFishery was operating at a loss of $35.4 million (Rp 578 billion).

The actual revenue for the same period was only $157 million (Rp 2.6 trillion). This gap represents a significant deviation from what was initially claimed.

The discrepancies were revealed through a leaked internal financial report. The 52-page document was shared among eFishery's investors, highlighting inflated revenue figures.

The report also revealed that eFishery had exaggerated the number of fish farming partners it worked with. The company claimed over 400,000 partners, but the actual number was found to be just 24,000.

As a result, eFishery’s management responded by temporarily suspending CEO Gibran Huzaifah and Chief Product Officer Chrisna Aditya.

The company appointed interim executives to replace them. Adhy Wibisono was named CEO, and Albertus Sasmitra took over as interim CFO.

The investigation began after a whistleblower approached one of eFishery's board members, claiming that the company's financial records were inaccurate.

Patrick Walujo, the CEO of GoTo and a key investor in eFishery, expressed concern over the allegations. He suggested that the fraud had been systematic, possibly dating back to 2018.

Walujo further emphasized that the audits had uncovered evidence of long-term manipulation of data.

This case serves as a warning to investors and stakeholders about the importance of financial transparency in startups.

Although eFishery has yet to comment on the fraud allegations, the company now faces an uncertain future as the investigation continues.

PHOTO: BLOOMBERG