The release of two foreign nationals suspected of embezzling millions of dollars from a Saudi Arabian company has raised new concerns about foreign investor confidence in Indonesia. Legal experts warn that the decision to free the suspects through a restorative justice mechanism could signal a lack of legal certainty, potentially deterring future investment.
Saudi Investor Fraud Case in Indonesia
A prominent Saudi Arabian company that has invested in Indonesia since 2012 filed a police report in October 2022. The company accused two Indian nationals, identified as AS and SH, of embezzling funds and falsifying documents during a commercial dispute. The case is linked to a court-approved debt restructuring process under PKPU Decision No. 164/PDT-SUS.PKPU/2021/PN.NIAGA.JKT.PST in the Central Jakarta District Court.
The alleged embezzlement amounted to an estimated USD 62 million. According to the report, the suspects forged and used fraudulent documents, which resulted in the company being forced to pay claims totaling IDR 17 billion. Police registered the complaint under No. LP/B/5281/X/2022/SKPT for violating Articles 266 and 374 of the Indonesian Criminal Code.
Restorative Justice Controversy Sparks Concern
Despite being declared suspects and detained by the Jakarta Metro Police, AS and SH were released in 2023 through a restorative justice agreement. Legal experts questioned the decision, especially since the victims had not agreed to any compensation or settlement.
Legal practitioner Lucky Schramm criticized the move, calling it a misuse of legal procedures. “Yes, this has an impact because there is no legal certainty, while the amount (of the Saudi company’s losses) is very large. It will create fear among potential investors,” he stated on Tuesday, May 5, 2025, as reported by Metrotvnews.com.
Schramm further argued that the police’s actions amounted to legal acrobatics. “Don’t hide behind restorative justice if it ends up harming one of the parties, especially the victim,” he said. He emphasized that restorative justice should only apply to minor offenses and requires agreement from both parties. “If that’s not the case, then it shouldn’t be allowed. This situation raises questions about how this was allowed to happen,” Schramm added.
Foreign Investor Confidence at Risk in Indonesia
The handling of this case has raised broader concerns about Indonesia’s legal climate for foreign investors. Legal uncertainty, particularly in high-value commercial disputes, may discourage new investment and raise doubts among existing stakeholders.
The Saudi company, which has operated in Indonesia for over a decade, reported the release of the suspects to Jakarta Metro Police Chief Inspector General Karyoto. The complaint, submitted in August 2023 under letter number 071/U/SP/VIII/2023, expressed dissatisfaction with the use of restorative justice in such a significant case.
The lack of transparency in the process, paired with the magnitude of the alleged crime, has highlighted gaps in how Indonesia applies legal remedies to foreign investment-related disputes. The apparent absence of progress since the complaint only deepens these concerns.
Police Handling Under Scrutiny in High-Profile Case
The Indonesian National Police’s internal affairs division (Biro Wabproof Div Propam Polri) is currently reviewing the case. However, no significant developments have been reported since the company’s complaint. This stagnation reflects poorly on institutional accountability and adds to the perception that the legal system does not adequately protect foreign investors.
The controversy has sparked calls for greater oversight and more transparent procedures in handling cases that involve international investors and significant financial loss.
Calls for Legal Certainty to Protect Investors
Observers and legal professionals stress that ensuring legal certainty is vital for maintaining Indonesia’s appeal to foreign investors. The release of fraud suspects without victim agreement or restitution undermines trust in the rule of law.
“There must be a clearer resolution from those responsible, so that legal certainty can be upheld here,” said Schramm.
As Indonesia continues to position itself as a destination for foreign direct investment, restoring confidence in its legal processes will be essential. Addressing procedural gaps and enforcing accountability will help reassure investors that their interests are safeguarded under the law.
Source: metrotvnews.com
Image: Canva Images
