Extortion of Foreign Investors Sparks Call for Nationwide Audit of Kadin
The recent extortion scandal involving the Chairman of the Cilegon Chamber of Commerce and Industry (Kadin), Muh Salim, has sparked widespread criticism and demands for deeper scrutiny into similar practices across Indonesia.
The incident, which allegedly involved demands for USD 312.5 million in project allocations from PT China Chengda Engineering, has drawn attention to a broader pattern of “gangster-style” behavior under the guise of professional organizations.
Public policy observer Fernando Emas criticized the systemic nature of such practices, calling it a “tip of the iceberg” scenario.
“This is not unique to Cilegon; it’s happening across the country. Law enforcement must take firm legal action,” he said, as quoted by monitorindonesia.com.
He referenced President Prabowo Subianto’s instruction to eradicate thug-like behavior, even within organizations perceived as legitimate.
According to Fernando, tenders that are supposed to be conducted transparently are often influenced by behind-the-scenes arrangements between officials and businesses. He also emphasized that the government has not shown strong resolve in tackling this issue due to the involvement of key supporters in regional and national elections.
“Corruption eradication must start by eliminating fraudulent practices at the tender stage. Therefore, a full audit of all Kadin branches is necessary,” he asserted.
Ahmad Sahroni, Deputy Chairman of Commission III of the House of Representatives (DPR RI), echoed these concerns, labeling Salim’s actions as clear-cut premanism. He urged authorities to take strict action to deter similar behavior in the future.
Business and Kadin Central Office Respond to Investment Threats
In response to the backlash, Kadin Indonesia reaffirmed its commitment to maintaining a stable investment climate. Chairman Anindya Novyan Bakrie condemned any form of coercion or non-procedural approaches that disrupt legal certainty.
“Kadin Indonesia rejects all forms of pressure or intimidation that threaten legal certainty and investment sustainability,” he said, as reported by monitorindonesia.com.
Anindya emphasized that Kadin must uphold its integrity as a strategic partner of the government in economic growth. To that end, the organization will establish a verification and ethics team to review the structure and conduct of its regional affiliates.
“If violations are found, we will impose institutional sanctions—ranging from written warnings and suspension of authority to revocation of leadership mandates,” he added.
Kadin also plans to issue a new operational guideline to prevent future misconduct and will conduct internal audits of both Kadin Cilegon and Kadin Banten. Findings will be reported to the Ministry of Investment and the Banten Provincial Government.
Banten Police’s Decisive Action
Meanwhile, support for law enforcement has come from young entrepreneurs. Akhmad Hidayat, Coordinator of the Young Entrepreneurs Network of Banten (JPMB), praised the Banten Police’s decisive action.
“I deeply appreciate what the Banten Police have done through the Criminal Investigation Directorate. This should serve as a model for other regions,” he told rmoljabar.id.
Akhmad, who also leads HIPMI Bogor, said the move boosts investor confidence amid a volatile global economy.
“Creating a secure business environment is crucial for achieving President Prabowo’s 8% economic growth target,” he noted.
On May 16, Banten Police officially named Muh Salim a suspect and detained him for allegedly mobilizing mass action to demand un-tendered projects from PT Chengda. Two other individuals—Ismatullah, Deputy Chairman of Kadin’s Industry Division, and Rufaji Jahuri, Head of HNSI—were also implicated.
“Muh Salim and Ismatullah met with PT Chengda representatives and forcibly demanded projects. Ismatullah slammed the table, and Rufaji reportedly threatened to halt the project unless his organization was involved” said Banten Police’s Dirkrimum, Kombes Dian Setyawan.
As public outrage grows, the scandal has become a litmus test for Indonesia’s commitment to eradicating corruption and maintaining a pro-investment environment.
Source: monitorindonesia.com, rmoljabar.id
Special Photo Credit: via melinmtas.id
