The Retirement Fund (Incorporated) (KWAP) was deceived into investing nearly RM200 million in Indonesian agritech startup eFishery after the company’s management allegedly manipulated its financial statements, according to Prime Minister Datuk Seri Anwar Ibrahim.
The investment has drawn widespread attention because KWAP manages the retirement savings of Malaysia’s civil servants.
However, Anwar stressed that the investment was made through established governance and due diligence processes, describing the case as a “premeditated fraud” that also deceived some of the world’s largest institutional investors.
“The decision went through the evaluation and governance process, based on the information available at the time, which included verification of financial statements by internationally recognised certified auditors.”
KWAP Invested Nearly RM200 Million
In 2023, KWAP invested US$47.7 million, equivalent to approximately RM194 million, as part of eFishery’s US$200 million Series D funding round.
Responding to a parliamentary question from Subang MP Wong Chen, Anwar said the investment was ultimately undermined by deliberate manipulation carried out by eFishery’s management.
“Nevertheless, the eFishery investment was a premeditated fraud, and there was manipulation of financial reports by the management of eFishery.”
He stressed that several international investors with sophisticated governance systems were also affected by the same deception.
Following the discovery of the alleged fraud, the consortium of investors, including KWAP, has begun taking steps to recover the investment.
The measures include legal action, recovery efforts, internal governance reviews and stronger investment controls.
Anwar said KWAP has also conducted a comprehensive review of its investment evaluation, approval and monitoring processes, with the findings presented to its board.
“Following those deliberations, follow-up actions have been taken in accordance with the institutional governance framework and principles of accountability.”
Although no specific disciplinary actions against KWAP board members or management were disclosed, Anwar said improvements have already been implemented to strengthen future investment oversight.
How eFishery Became One Of Southeast Asia’s Biggest Startup Success Stories
Founded in Bandung, Indonesia, in 2013 by Gibran Huzaifah, eFishery quickly became one of Southeast Asia’s most celebrated technology startups.
The company developed Internet of Things (IoT)-powered automated fish feeders, allowing fish and shrimp farmers to monitor and control feeding remotely through a mobile application. The technology aimed to reduce feed waste, improve productivity and increase farmers’ profits.
Over time, eFishery expanded beyond hardware into a complete aquaculture ecosystem. Besides selling automated feeders, it also offered fish feed supplies, financing services, digital marketplaces, and software solutions connecting farmers with buyers and financial institutions.
Its mission of modernising Indonesia’s aquaculture industry attracted global attention.
By 2023, eFishery had successfully raised US$200 million in its Series D funding round, reaching a valuation of approximately US$1.4 billion and earning unicorn status.
Among its investors were some of the world’s most respected institutions, including Temasek, SoftBank, Northstar, 42XFund, Aqua-Spark and Malaysia’s KWAP, making it one of Indonesia’s most promising technology companies.
How The Alleged Fraud Worked
Behind its impressive growth, investigators later alleged that eFishery had been presenting a very different picture of its business to investors.
According to reports, the alleged manipulation began around 2018, when the company was facing funding pressure and struggling to secure fresh capital.
Investigations found that eFishery allegedly maintained two separate sets of financial records. One reflected the company’s actual business performance for internal use, while another contained inflated revenue, profits and financial figures presented to investors during fundraising exercises.
The investigation also alleged that the company created a network of related entities and shell companies to generate transactions that made its operations appear significantly larger than they actually were.
Among the findings reported by investigators were:
- Revenue for the first nine months of 2024 was presented as approximately US$752 million, while actual revenue was estimated to be only around US$157 million.
- Investors were reportedly shown a US$16 million profit, when the business had actually recorded a loss of more than US$35 million.
- Overall revenue was believed to have been overstated by nearly US$600 million during the reporting period.
- Investigators also estimated that roughly US$300 million of investors’ money remains unaccounted for.
The inflated figures helped eFishery continue raising money from global investors while maintaining the image of a fast-growing technology unicorn preparing for a future public listing.
KWAP Investment Was Approved After Due Diligence
The eFishery scandal has raised an important question: How could so many experienced investors miss the warning signs?
According to Anwar, KWAP did not bypass its investment procedures.
The investment was approved only after internal evaluations, independent due diligence, governance reviews and verification of audited financial statements.
“At the same time, the consortium of investors, including KWAP, also carried out independent due diligence to ensure that all information was complete and valid for investment consideration.”
The same investment round also involved globally recognised investors including Temasek, SoftBank, 42XFund and Northstar, all of which have internationally recognised investment governance and risk management processes.
Reports suggest that due diligence teams conducted financial reviews and site visits before investing. However, investigators later alleged that some inspection visits may have relied on information and locations provided by eFishery itself, allowing the company to prepare selected farms before investors arrived.
The nature of Indonesia’s aquaculture industry also made verification more challenging, with fish farms spread across thousands of islands and rural locations, making independent inspections costly and difficult.
Scandal Shakes Southeast Asia’s Startup Ecosystem
The collapse of eFishery has become one of the largest startup scandals in Southeast Asia, extending far beyond the losses suffered by investors.
The scandal has significantly affected confidence in Indonesia’s startup ecosystem, with reports showing many funding rounds being delayed while investors adopted stricter due diligence standards.
Venture capital firms are now conducting deeper financial, operational and legal reviews, placing greater emphasis on sustainable business fundamentals rather than rapid growth and lofty valuations.
As investigations and recovery efforts continue, the eFishery case serves as a reminder that even experienced investors can become victims when financial information is deliberately manipulated, reinforcing the importance of continuous oversight, governance and independent verification.
Sources: 1| 2| 3| 4| 5
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