On January 31, Investree said that it had agreed to terminate CEO Adrian Gunadi from his position effective immediately, following media reports that had resigned due to alleged misconduct. The now-ex Investree CEO allegedly diverted Investree funds to his personal account while using the company as a guarantor for another company he owned. In a statement, Investree said that entities under the names of PT Putra Radhika Investama and PT Radhika Persada Utama are not its affiliates, and that Investree did not serve as a guarantor for either entity.
Kok Chuan Lim, co-founder and director at Investree Singapore Pte Ltd, was quoted by Tech In Asia as saying, “We hope to complete the restructuring plan soon with the injection of new equity from investors.”
Hope springs eternal – but this is going to be a heavy lift for Investree. The allegations of misconduct on the part of Gunadi have already damaged investor confidence in the company. It is one thing to burn investor cash in a poorly executed business strategy – fintechs do so all the time. It is another to misappropriate funding and deceive investors.
Unsurprisingly, Qatar’s JTA International Holding has reportedly delayed disbursement of that US$231 million. Given the current situation, caution on their part is warranted.
Meanwhile, Investree also seems to have a non-performing loan (NPL) problem. The company’s current NPL rate is 16%, according to CrossASEAN Research cited by DigFin. Since Indonesia’s maximum permissible NPL level is 5%, Investree is facing heavy regulatory pressure for its problematic loan book.
We have to say that we find this turn of events surprising in a certain sense. After all, Investree is one of Indonesia’s best established P2P lenders. It has been around since 2015. As of October 2023, it said it had disbursed more than 14 trillion rupiah (US$900 million) in loans. Until very recently, the company had seemed to have a sound business model.
That said, the allegations against Gunadi should not be taken lightly, and DealStreetAsia reported on January 31 that the Financial Services Authority (OJK) is auditing Investree. The results of the audit will likely have a significant impact on the company’s future direction and investors’ related decisions.