Attorney General’s Office Names Finance Ministry’s Budget Director General as Suspect in Jiwasraya Corruption Case

JAKARTA, investortrust.id – The Attorney General’s Office has named Isa Rachmatarwata, director general of budget at Indonesia’s Ministry of Finance, as a suspect in the corruption case involving the financial management and investment funds of defunct state-owned insurer PT Asuransi Jiwasraya (Persero) during the 2008-2018 period. 

The decision came after an investigation and case review by Kejagung. Isa was implicated in the case in his former role as head of the Insurance Bureau at the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) from 2006 to 2012.

Allegations and Estimated State Losses

"The investigation has uncovered sufficient evidence indicating criminal actions committed by IR during his tenure as Head of the Insurance Bureau at Bapepam-LK from 2006 to 2012," said Abdul Qohar, Director of Investigations at AGO’s Special Crimes Division, in a press conference at its headquarters in Jakarta on Friday, Feb. 7, 2025. He referred to Isa by his initial.

According to Abdul, Isa was allegedly involved in designing the “saving plan” program, which ultimately led to massive financial losses for Jiwasraya. The state losses due to the scheme are estimated at Rp 16.8 trillion ($1.05 billion).

Finance Ministry Respects the Legal Process

In response to the arrest, the Ministry of Finance stated that it respects the ongoing legal proceedings.

“We respect the legal process currently underway,” said Deni Surjantoro, head of the Finance Ministry’s Communications and Information Services Bureau, when asked about Isa’s arrest on Friday, Feb. 7, 2025.

Detention at Salemba Prison

Following the indictment, Isa was placed in Salemba Detention Center (Rutan Salemba), under Kejagung’s jurisdiction, for an initial 20-day detention period. "Tonight, the suspect will be detained for 20 days at Rutan Salemba, under the Attorney General’s Office," Abdul Qohar added.

The case is part of a broader crackdown on financial misconduct, with authorities emphasizing their commitment to holding officials accountable for corruption in state-owned enterprises (SOEs).

The Fall of Jiwasraya

The Jiwasraya debacle stands as one of Indonesia’s most significant financial scandals, rooted in years of mismanagement, risky investments, and poor regulatory oversight. The state-owned insurer failed to honor insurance payouts in 2018, triggering a liquidity crisis that left thousands of policyholders in limbo.

Investigations revealed fraudulent investment practices, leading to estimated state losses of Rp 16.8 trillion and the prosecution of top executives, including former director Hendrisman Rahim and prominent stock trader Benny Tjokrosaputro, CEO of PT Hanson International Tbk.

Hendrisman, Benny, and three other individuals were found guilty of orchestrating fraudulent investment schemes that led to significant financial losses for the state-owned insurance company, PT Asuransi Jiwasraya (Persero). They all now serve life sentences for their crime.

To prevent systemic risk, the Indonesian government launched a policy restructuring program, transferring most of Jiwasraya’s insurance liabilities to PT Asuransi Jiwa IFG (IFG Life), a subsidiary of the state-owned Indonesia Financial Group (IFG).

By 2024, over 99% of policyholders had agreed to migrate to IFG Life, paving the way for Jiwasraya’s liquidation. In September 2024, the Ministry of State-Owned Enterprises (BUMN) and Financial Services Authority (OJK) moved to dissolve the failed insurer, effectively marking the end of Jiwasraya while its rebranded successor, IFG Life, took over its policyholder obligations.