The establishment of a caretaker team comes amid unflagging trouble for Investree, from ongoing investigations over alleged fraud to legal challenges from lenders. According to DealStreetAsia, Investree said that the new team is focused on gradually restoring limited operations, supported by an operational fund for collection activities. The identities of the team members remain undisclosed.
This development follows the January departure of Adrian Gunadi from the role of CEO at Investree. On January 31, Investree said that it had agreed to terminate CEO Gunadi from his position effective immediately, following media reports that he had resigned due to alleged misconduct. Gunadi 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, said at the time, “We hope to complete the restructuring plan soon with the injection of new equity from investors.”
Unfortunately, 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, the big investment of Qatar has been put on hold.
Meanwhile, Investree also seems to have a non-performing loan (NPL) problem. The company’s NPL rate earlier this year reached 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.
In some ways, this turn of events is surprising. 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.
Whether Investree remains a viable business will depend largely on the results of the ongoing investigations and lawsuits. To that end, the OJK began an audit of Investree earlier this year that remains ongoing.