AGO targets nation's richest in latest tax graft scandal

As the current administration continues its crackdown on financial crimes during President Prabowo Subianto 's first year in office, the corruption investigation targeting Victor Hartono, executive director of private tobacco giant PT Djarum, remains one of the most significant cases mounted by the Attorney General's Office (AGO).

Victor, the eldest son of tycoon Robert Budi Hartono, was placed under a travel ban by the Immigration and Corrections Ministry at the AGO's request. Effective from Nov. 14 until May 14, 2026, he appeared alongside four others subjected to the ban: former taxation director general Ken Dwijugiasteadi, junior tax auditor Karl Layman, tax consultant Heru Budijanto Prabowo and Bernadette Ning Dijah Prananingrum, head of the central tax office in Semarang, Central Java.

However, as of Nov. 29, the AGO has since revoked Victor's travel ban, citing his cooperation during questioning. The ban on the four other individuals remains in force. Despite the revocation, Victor continues to undergo legal scrutiny, with prosecutors emphasizing that the investigation into the alleged tax graft scheme is still ongoing.

The AGO's investigation centers on allegations that Victor colluded with tax officials at the Finance Ministry to manipulate Djarum's tax obligations between 2016 and 2020.

Because the alleged scheme occurred during Sri Mulyani Indrawati's tenure as finance minister, speculation has grown that she might be drawn into the case. However, AGO spokesman Anang Supriatna has downplayed that possibility, saying there are currently no plans to summon the former minister. Meanwhile, prosecutors have questioned Suryo Utomo, who replaced Ken as tax chief during their investigation in 2019.

The scheme reportedly operated through a rogue tax official who reduced the tax liabilities of selected companies. These reductions were arranged via explicit agreements between the official and corporate taxpayers, whose tax bill was adjusted illicitly in exchange for bribes. "There was compensation for reducing [the tax payment amount]," Anang confirmed.

The AGO has conducted raids at several locations including the residences of implicated tax officials, confiscating luxury cars, motorcycles and documents.

While prosecutors have yet to disclose the details of the case or publicly identify the companies that participated in the scheme, singling out Victor signals that his multitrillion-rupiah tobacco company is firmly under scrutiny. For an administration to train its sights on a member of the Hartono clan also demonstrates political will to confront the very top tier of the country's business elite.

The family, which had an estimated net worth of US$50.3 billion as of December 2024, is a majority shareholder of Bank Central Asia (BCA), the country's largest private bank in terms of assets, and controls a sprawling corporate empire spanning banking, tobacco, technology and real estate.

The sudden launch of the AGO investigation has also drawn the attention of observers questioning why Djarum is being targeted. If the case proceeds substantively, it will mark the second time the AGO has pursued a major tycoon: it is still seeking oil magnate Muhammad Riza Chalid, who remains a fugitive abroad, for his alleged role in the Rp 285 trillion (US$17 billion) fuel adulteration scandal involving state-owned energy giant Pertamina uncovered earlier this year.

Adding to the uncertainty is the timing. Just months ago, state asset fund Danantara launched its patriot bonds program. Offering a modest 2 percent yield, well below market rates, the program is aimed squarely at the country's wealthiest firms to help finance a flagship waste-to-energy plant.

While not mandatory, reports suggest Prabowo is pressuring conglomerates to participate or risk falling out of favor with his administration. Despite some initial hesitation, Djarum has emerged as one of the program's strongest supporters, reportedly buying over Rp 3 trillion in patriot bonds. This raises questions as to why the company now appears to be at odds with the AGO, a law enforcement body that is often criticized for its political selectivity.

It remains to be seen whether these and other details will be uncovered as the investigation continues.