Indonesia Due Diligence: Here's what the Makarim conviction and MSCI's November deadline mean for compliance teams doing business in Indonesia.
On June 30, a Jakarta court sentenced Nadiem Makarim, the co-founder of Gojek and Indonesia’s former education minister, to 10 years in prison. The case centered on Chromebook procurement for schools during the pandemic, and prosecutors argued the decision to standardise on Google’s ChromeOS was tied to Google’s investment in Gojek’s parent company, GoTo. Makarim has denied wrongdoing and is appealing. Former Google executives testified there was no link between the investment and the procurement decision. The court disagreed on the conflict-of-interest point, while also finding Makarim did not personally enrich himself.
A few days earlier, global index provider, MSCI announced it would keep Indonesia in its Emerging Markets index, for now. But it set a deadline: November 2026. If Indonesia can’t show real progress on ownership transparency and trading practices by then, MSCI may open a formal consultation on downgrading the country to Frontier Markets, a move analysts estimate could trigger billions of dollars in passive fund outflows.
Different stories, different institutions, different stakes. But read them together, and there’s a pattern.
The Common Thread isn’t Corruption. It’s Visibility.
MSCI didn’t flag Indonesia for weak growth or bad fundamentals. It flagged persistent opacity in shareholding structures and suspected coordinated trading, concerns that make it hard for investors to work out who actually holds the free float and whether prices reflect real market activity.
The Makarim case, whatever the courts ultimately decide on appeal, turned on the same underlying question: who has an interest in this company, and was that interest disclosed?
From the Nadiem Makarim case and MSCI’s recent warning, everyone is asking “is Indonesia safe to invest in?” We’d argue the real question is “do you actually know who you’re dealing with in Indonesia?” Both stories come down to the same thing: you can see a company’s name and its people, but not the ownership and interests underneath.
Why Indonesian KYB is Structurally Harder Than it Looks
Before you can answer “who owns this company,” you need to understand what Indonesian corporate infrastructure actually gives you to work with.
Indonesia’s business registration number (NIB) is issued by one government system (OSS), and the legal company registry sits in another (AHU), and the two don’t talk to each other. There’s no official cross-reference. This is not an edge case. It is the baseline architecture of Indonesian company registration. If that’s the state of the government’s own infrastructure, imagine what a foreign compliance team is working with when they try to verify an Indonesian counterparty from the outside.
This is precisely the gap MSCI is flagging when it demands improvement in ownership transparency. It is also the gap that makes counterparty due diligence in Indonesia slower and less reliable than it should be for any organisations operating there, corruption case or no corruption case.
What This Means if You’re Doing Business in Indonesia
MSCI’s November deadline is a market-level version of the same due diligence question every compliance team already asks at the counterparty level. The market needs to answer it to keep its index status. You need to answer it before you sign a contract.
The Makarim case will run its course through appeal. Indonesia’s MSCI status will be decided in November. Neither of those timelines is something you control. What you can control is whether you actually know who’s on the other side of the table right now.
None of this means you should avoid Indonesia. It means treating “who owns this company” as a question you have to actively answer, not one you can assume the registry will answer for you.
That’s the gap we built AsiaVerify to close.
AsiaVerify sources directly from Indonesian government registries, covering entity status, director and shareholder data, and UBO structure, and reconciles the separate registration systems that constitute Indonesia’s actual corporate infrastructure. The output is structured and decision-ready, mapped to the questions compliance teams actually need to answer.
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