The OJK intends to pursue Gunadi. The agency is poised to freeze his bank accounts, trace his assets, and “pursue all necessary steps to ensure accountability,” The Business Times reported.
The Singaporean newspaper further referenced a statement from the Indonesian financial services regulator, which stated, “OJK had previously issued warnings and imposed business restrictions, but Investree failed to implement necessary corrective actions.”
With regards to Gunadi, on January 31, Investree said that it had agreed to terminate him 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.
In addition to the allegations against Gunadi, Investree’s business model also has a non-performing loan (NPL) problem. Earlier this year, its NPL rate reached 16%, according to CrossASEAN Research cited by DigFin. Since Indonesia’s maximum permissible NPL level is 5%, Investree has been 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 recently, the company had seemed to have a sound business model.
It now appears Investree will be undone by a combination of misconduct on the part of its leadership and a flawed business model under which NPLs reached an unacceptably high level.