Co-founders Gibran Huzaifah and Chrisna Aditya were suspended in December when allegations of financial irregularities first came to light
So reports Deal Street Asia, which claims to have been given details from a forensic audit of the Indonesian startup – an audit that implicates key figures in the company, including co-founder and former CEO, Gibran Huzaifah.
Established in 2013, eFishery* uses data from its smart feeders to improve the operations of smallholder fish and shrimp farmers – with the data not only helping to boost farmers' productivity but also improve their access to feed, financing and markets. The allegations are likely to do significant damage the high-flying company, which was the first startup in the global aquaculture industry to reach a valuation of over USD$1 billion in July 2023, following a $200 million series D investment round.
Huzaifah and fellow co-founder Chrisna Aditya were suspended in December following an investigation into alleged financial irregularities. According to Deal Street Asia’s sources, the alleged fraud is understood to date back to 2018, when the startup was raising series A funding.
“Initial findings by a global firm hired to conduct a forensic audit on eFishery reveal a complex scheme of alleged financial manipulation involving dual financial reporting, setting up of nominee companies, and fabricated transactions that purportedly inflated the companyʼs revenue and profit figures for years,” Deal Street Asia writes.
“Gibran Huzaifah, eFisheryʼs ex-CEO, is said to have allegedly created and maintained two sets of accounting books from 2018… to meet the series A fundraising target, Huzaifah allegedly decided to inflate the companyʼs revenue by 20-25 percent to attract investors,” the authors of the article add.
Huzaifah allegedly presented one set of books to external parties, while the other was kept for internal use. As the gap between these figures increased, he incorporated five new companies in January 2022, allegedly to enable “round-tripping” – the transfer of funds from one party to another within the group of companies – to support the flow of money for fraudulent transactions.
According to Deal Street Asia's sources, Huzaifah “also allegedly overstated capital expenditure figures, which not only misled stakeholders about the companyʼs financial health but also helped justify its declining cash position”.
“By late 2024, the gap between eFisheryʼs actual and allegedly inflated performance had grown too wide to go unnoticed, leading to whistleblower allegations and subsequent investigations,” they add.
*eFishery and Hatch are both part of Aqua-Spark's investment portfolio, but The Fish Site retains editorial independence.
