Summary:
EFishery Pte allegedly inflated its revenue by $600 million.
Over 75% of reported figures may have been fake.
Gibran Huzaifah, co-founder and CEO, was dismissed amid the investigation.
The company initially reported a $16 million profit but actually faced a $35.4 million loss.
EFishery's revenue was reported as $752 million, while actual figures were around $157 million.
The Allegations Against EFishery
EFishery Pte, a leading Indonesian agritech startup, is under scrutiny for allegedly inflating its revenue and profits over several years. This investigation was prompted by a whistleblower's claims regarding the company's accounting practices.
Investigation Findings
A preliminary report indicates that management may have inflated revenue figures by nearly $600 million during the nine months leading up to September 2024. This means over 75% of the reported revenue was potentially fabricated. The investigation was initiated after a whistleblower approached a board member, leading to a formal probe commissioned in December.
Background of EFishery
EFishery, which specializes in providing smart feeding devices to fish and shrimp farmers, had gained a valuation of $1.4 billion after significant investments from notable backers like SoftBank Group Corp. and Temasek Holdings Pte. The company aimed to modernize Indonesia's fish industry and initially boasted a $16 million profit for the first nine months of 2024. However, the investigation suggests the startup actually faced a $35.4 million loss during that period.
Discrepancies in Revenue Reporting
According to the draft report, EFishery's revenue was actually around $157 million, a stark contrast to the $752 million figure presented to investors. The investigation revealed that the discrepancies in revenue and profit reporting extended over several previous years.
Management Changes
In light of these findings, EFishery's board has taken action by dismissing co-founder and CEO Gibran Huzaifah. The company has publicly acknowledged the seriousness of the situation, stating, "We are fully aware of the gravity of the market speculation and we take this matter with the utmost seriousness."
Commitment to Governance
EFishery emphasizes its commitment to maintaining the highest standards of corporate governance and ethics throughout its operations, as it navigates this challenging period.
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