ASDP Corruption Case: 11 Governance Failures and 11 Experts Who Could Not Agree ⚖️🚢

Eleven Governance Failures Identified by the Court 🧩

What turned a failed business deal into a criminal case? Prosecutors alleged that internal processes were ignored, external warnings were disregarded, and that the project was pushed through recklessly.

After examining witness testimony and reviewing extensive documentary evidence, the court laid out 140 distinct points of legal fact. From these facts, a clear and troubling pattern emerged. Rather than identifying a single fatal error, the judges described a cascading series of governance failures that, taken together, formed the basis for criminal liability.

1. Deliberate Weakening of Internal Control Frameworks

ASDP’s Board of Directors did not merely overlook internal governance rules; it actively dismantled them. Initially, ASDP’s cooperation guideline (BoD Decree No. 35) required feasibility studies, partner evaluations, assessments of financial capability, and prior approval from the Board of Commissioners.

Subsequently, the CEO and the Commercial Director instructed the Legal Vice President to revise this guideline to “simplify” requirements. The resulting BoD Decree No. 86 introduced a special exemption for ship cooperation, effectively removing the very safeguards designed to constrain high-risk transactions. The court did not treat this as an administrative adjustment. It characterized the move as a conscious governance override aimed at smoothing the path for a specific transaction. The Legal VP approved the revision under pressure and was later reassigned, reinforcing the finding that internal checks were suppressed rather than exercised.

2. Marginalization of the Risk Management Function

ASDP’s Risk Management unit classified the proposed cooperation with PT JN as high risk (red). Its objections were explicit and comprehensive, citing incomplete data, invalid assumptions, absence of RKAP funding, lack of approvals, and weak financial capacity of the partner.

Instead of triggering corrective action, the risk assessment provoked verbal abuse against the Risk VP and was dismissed in board-level discussions. The court viewed this not as a professional disagreement, but as institutional sidelining of a core control function 🚨.

3. Commissioners Reduced to a “Fait Accompli”

The Board of Directors signed binding cooperation agreements before obtaining approval from the Board of Commissioners. Only afterward were commissioners informed, with the agreements framed as completed “progress.” Earlier commissioners had explicitly opposed the acquisition and warned against its commercial logic. They were subsequently replaced. Approval was later secured from a newly constituted Board of Commissioners, effectively neutralizing oversight through sequencing.

4. Intentional Structuring to Avoid Approval Thresholds

The evidence showed that directors were aware the cooperation would incur costs of approximately Rp32 billion per month, exceeding their authority and requiring commissioners’ approval. To circumvent this requirement, the agreement intentionally omitted cost clauses, stating instead that costs would be “regulated separately.” The court explicitly described this arrangement as operating in a “grey area” designed to bypass governance thresholds.

5. Inconsistent Disclosures to Oversight Actors

Materially different narratives were presented to different oversight bodies. Commissioners were not informed that the cooperation was designed as a prelude to acquisition, while the Minister of SOEs was told that the cooperation served precisely that purpose. Ministerial approval was therefore obtained on the basis of information not shared with the commissioners, fracturing the integrity of the approval process.

6. Execution Before Feasibility and Evaluation Completion

The cooperation agreement was executed while feasibility studies and external evaluations were still ongoing. Essential studies were completed only after execution, meaning ASDP entered into binding commitments without a complete factual basis.

7. Acquisition Without an Internal Acquisition Framework

ASDP began due diligence and acquisition steps before issuing any internal acquisition guideline. The court found that the entire process from late 2020 through 2021 occurred in a regulatory vacuum, contrary to basic principles of SOE governance.

8. Ignored Red Flags from Specialized Due Diligence

Multiple due diligence streams identified serious risks. Tax due diligence flagged potential underpaid taxes of approximately Rp71 billion. Technical due diligence highlighted unfit vessels and substantial docking and repair needs. Operational assessments described an aging and poorly maintained fleet. These findings were either ignored or excluded from pricing and decision-making.

9. Asset and Equity Valuation Anomalies

The court found systematic inflation in PT JN vessel values relative to ASDP’s own fleet, even where ASDP vessels were newer or technically superior. Equity valuation relied on optimistic growth assumptions inconsistent with historical performance and failed to incorporate due diligence findings. Consultants lacked full working papers and relied on incomplete inputs.

10. Post-Transaction Cost Shifting

Mandatory docking and repairs were deliberately postponed prior to acquisition, ensuring that these costs would be borne by ASDP after ownership transfer. Internal communications confirmed that this postponement was intentional.

11. Failure to Properly Account for Fiscal Exposure

Applying a net loss (kerugian bersih) approach, the court calculated Rp892 billion paid for shares and Rp380 billion paid for affiliated vessels, totaling Rp1.272 trillion. After deducting negative net assets (–Rp96.295 billion) and the fair value of 11 vessels (Rp114.864 billion), the court confirmed a state loss of Rp1.253 trillion, reinforced by a BPK compliance audit 📊.

⚖️ Defence Experts: Reasserting Legal Boundaries

Prof. Rhenald Kasali (Business Strategy)

Kasali framed the transaction as strategic miscalculation amid uncertainty, worsened by COVID-19 distortions—not corruption.

Achmad Utoyo Hadi (Maritime Law)

Utoyo emphasized that seaworthiness is a legal certification status, not a subjective economic judgment. Ship condition disputes belong in inspection regimes and contracts, not criminal attribution.

Prof. Nindyo Pramono (Corporate Law)

Nindyo anchored the defence in the Business Judgment Rule, warning courts against substituting hindsight for contemporaneous judgment.

Dian Puji Nugraha Simatupang (Public Finance Law)

Dian Puji stressed that state loss is a legal determination, not an economic opinion, and must be actual, definite, and formally declared by authorized institutions.

Eko Sembodo (Former BPK Auditor)

He warned against reducing audit to numbers alone and emphasized contextual evaluation of public benefit.

Amien Sunaryadi (Anti-Corruption Governance, former KPK leader)

Amien issued the starkest warning:

• Not all losses are corruption.

• Over-criminalisation creates governance paralysis.

  Anti-corruption law must target intent, collusion, and abuse—not failed judgment alone.
  

📌 Lessons Learned for the Private Sector Dealing with SOEs: Never Assume “SOE Approval” Equals Legal Safety 🛑

The ASDP case is often presented as a warning for SOE leaders ⚠️. That reading is incomplete.

Equally important is what the case reveals about the risks faced by the private sector (investors, vendors, acquisition targets, consultants, and financial advisors) who do business with SOEs and often assume that institutional risk sits mainly on the state side of the deal.

ASDP exposes a harsher reality 🧱. When an SOE transaction is later criminalized, private counterparties are not just bystanders. They often become criminal suspects themselves, alongside SOE executives, even where there is no allegation of bribery, kickbacks, or personal gain.

At the same time, the commercial impact hits immediately. Contracts are frozen. Payments are delayed. Financing is withdrawn. Transactions slowly unravel while investigations drag on ⏳.

In many cases, the private sector ends up suffering more than SOE leaders. SOE executives may eventually benefit from institutional protection, administrative remedies, or even political rehabilitation 🏛️. Private companies, by contrast, are left with prolonged legal uncertainty, reputational damage, disrupted cash flow, and stranded assets—often with no clear path to resolution as criminal proceedings continue.

Much of this risk flows from a common misconception: that once an SOE’s Board of Directors has approved and signed an agreement, the transaction is institutionally safe. The ASDP case shows how fragile that assumption can be. Directors may act beyond their authority. Approvals from the Board of Commissioners may be incomplete, conditional, or obtained only after the deal is executed. Internal governance rules may be selectively weakened or quietly bypassed to accommodate a specific transaction.

For private counterparties, the lesson is therefore stark 🛑. Legal safety cannot be inferred from signatures alone. It cannot be assumed from formal approvals on paper. Private parties must independently assess whether approvals are substantively valid, procedurally complete, and obtained at the right stage of the transaction.

That means asking uncomfortable but necessary questions before committing.

Has the Board of Commissioners approved the deal before execution, or only after the fact?

Does the transaction clearly fall within the authority threshold of the directors who signed it?

Are the approvals unconditional, or framed as retroactive ratification of decisions already taken?

These are not box-ticking exercises 📋. They are risk controls. The answers must be documented, escalated where needed, and embedded into transaction records. In a legal environment where commercial decisions may later be reinterpreted through a criminal-law lens, independent verification of SOE governance is no longer optional for the private sector. It is, quite simply, a matter of survival.

Source: 

• Decision of District Court of Central Jakarta 68/Pid.Sus-TPK/2025/PN Jkt Pst.