Adaro witness summons revives questions over tycoon rivalry

The corruption investigation into the Banjarmasin Medium Tax Office (KPP Madya) has taken an unexpected turn, with the Corruption Eradication Commission (KPK) examining senior tax officials linked to Adaro, one of Indonesia’s largest business groups. The development has brought renewed attention to Adaro’s long and complicated ownership history, including a past dispute involving businessman Hashim Djojohadikusumo, the younger brother of President Prabowo Subianto.

The KPK summoned Jul Seventa Tarigan, a former head of tax at PT Adaro Energy Tbk, as a witness in the Banjarmasin tax-corruption investigation. Jul was scheduled to be questioned on Aug. 19, but did not attend. The KPK said it was seeking information on the tax-audit process and mechanisms at KPP Madya Banjarmasin, rather than limiting its inquiry to Adaro’s own tax affairs. It was not the first time the KPK has sought information from an Adaro-linked executive in the case. In April, the agency summoned Edward Ennedy Rorong, finance director of Adaro Wamco Prima, as a witness. Edward also did not attend.

The investigation began with a sting operation on Feb. 4, in which the KPK arrested KPP Madya Banjarmasin Head Mulyono, PT Buana Karya Bhakti (BKB) Finance Manager Venasius Jenarus Genggor and tax auditor Dian Jaya Demega. The KPK seized Rp 1 billion (US$56,700) during the operation. The case concerns BKB’s 2024 value-added tax (VAT) restitution application. An audit found a Rp 49.47 billion tax overpayment, followed by a Rp 1.14 billion fiscal correction that reduced the approved restitution to Rp 48.3 billion. Mulyono allegedly sought a Rp 1.5 billion “appreciation payment” in connection with the restitution.

After KPP Madya Banjarmasin issued the tax-overpayment assessment and refund decision, the restitution was disbursed on Jan. 22. According to the KPK’s case reconstruction, BKB used a fictitious invoice to facilitate payment of the agreed Rp 1.5 billion. The money was then divided, with Rp 800 million allegedly going to Mulyono, Rp 200 million to Dian and Rp 500 million to Venasius. Venasius subsequently deducted Rp 20 million from Dian’s share.

The KPK’s decision to examine Adaro-linked tax officials is notable because of the group’s longstanding presence in South Kalimantan, where the investigation is centered. It also comes as the agency broadens its inquiry beyond the original BKB transaction. In August, the KPK said it had found indications of other payments involving officials at KPP Madya Banjarmasin and was gathering additional evidence, including in a potential money-laundering investigation.

That broader inquiry has brought a historical dimension to the case. Adaro was once partly controlled by Hashim Djojohadikusumo, who held a 40 percent stake through Asminco Bara Utama. In October 1997, Asminco secured a US$100 million bridge loan from Deutsche Bank using its Adaro shares as collateral. After the Asian financial crisis, Asminco defaulted. Deutsche Bank subsequently took control of the shares and sold the stake to PT Dianlia Setyamukti for US$46 million in 2001.

Hashim later pursued the matter through Beckett Pte Ltd, alleging a conspiracy surrounding the sale. In 2007, however, a Singapore court rejected the conspiracy claim and awarded only symbolic damages. The ruling effectively ended Hashim’s legal claim to the Adaro stake.

While Hashim’s legal battle was unfolding, another group of businessmen was building its position in Adaro. In June 2005, a consortium involving Garibaldi “Boy” Thohir, Benny Subianto, Edwin Soeryadjaya and Theodore Rachmat acquired a 41 percent stake from New Hope Australia for US$378 million. The acquisition was financed through a US$600 million loan and a US$353 million mezzanine facility. Boy Thohir subsequently became one of the central figures in Adaro. In 2008, Adaro went public on the Indonesia Stock Exchange, raising Rp12.25 trillion.

The history has acquired a political dimension in recent years because Boy Thohir’s younger brother, Erick Thohir, has been a prominent member of Prabowo’s government. In 2025, speculation also circulated that Hashim might seek to return to Adaro. However, the speculation was not accompanied by evidence of a major share transaction or a formal change in ownership.

Erick’s position in government has nevertheless changed significantly. Following the establishment of Danantara in late 2024, the management of major state-owned enterprises increasingly shifted away from the Ministry of SOEs. Law No. 16/2025, enacted in October 2025, subsequently reorganized the institutional framework by establishing the BP BUMN as the regulator of state-owned enterprises, while Danantara took on a greater role in managing state assets.

The timing creates an intriguing intersection between an expanding tax-corruption investigation and the history of one of Indonesia’s most politically connected business groups. But the connection remains circumstantial. Only if the investigation produces evidence connecting relationships between taxpayers, tax officials and business intermediaries in Banjarmasin to political or business rivalries would the older Adaro dispute become more than historical context.