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Tech founder’s downfall in Indonesia shows rising business risks

Olivia Poh, Chandra Asmara & Ben Otto / Bloomberg
Olivia Poh, Chandra Asmara & Ben Otto / Bloomberg • 8 min read
Tech founder’s downfall in Indonesia shows rising business risks
The high-profile trial is throwing a spotlight on Indonesia’s legal process at a time when the unpredictability, and assertiveness, of President Prabowo Subianto’s administration are drawing concern.
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(June 18): Nadiem Makarim, once hailed as the star of Indonesia’s digital revolution, left his unicorn start-up to become the education minister. He is now facing the prospect of 18 years in jail if found guilty of corruption during his public service.

The 41-year-old has been charged with alleged graft over a government decision to purchase more than a million Google Chromebooks for schools in 2020-2022. Prosecutors have accused him of pocketing 809 billion rupiah (US$46 million or $57 million) as a reward for awarding the contract to Google, which was an investor in his former company Gojek, and causing 2.2 trillion rupiah in state losses.

Makarim has denied wrongdoing, arguing the investigation was “flawed” and prosecutors failed to prove any of the charges. He said choosing the ChromeOS was not a ministerial decision, while using that particular operating system helped save the state trillions of rupiah. Far from enriching himself, his personal wealth dropped by more than 50% during his tenure as a public servant, according to his lawyers.

State prosecutors have asked for an 18-year prison sentence and financial penalties of 5.7 trillion rupiah, or face an additional nine years in jail. The Harvard Business School grad has said he doesn't have the funds to pay such a large sum. Judges are expected to hand down a decision with weeks.

"My case has really struck fear in young professionals everywhere working for government right now. It has become a kind of a horror story," Makarim said in a March 28 interview in hospital, where he was receiving medical treatment. He was held in a detention centre after his arrest in September until last month, when he was allowed home arrest for health reasons.

His high-profile trial is throwing a spotlight on Indonesia’s legal process at a time when the unpredictability — and assertiveness — of President Prabowo Subianto’s administration are drawing concern among investors and businesses alike. Foreigners have pulled roughly a net US$4 billion from Indonesian equities this year, making the stock benchmark the world’s worst performer, while the currency has fallen about 6% against the dollar.

See also: Citi analyst blasted by Indonesia says fiscal risks have peaked

In recent weeks, Prabowo unveiled controversial plans to centralise key commodity exports and fired the head of his flagship US$15 billion free-meal programme amid a corruption probe. Prabowo has repeatedly said he won’t tolerate graft and is seeking to strengthen the economy. But his erratic execution is denting trust in Indonesia’s institutions.

In another case that has drawn attention, prosecutors are asking for an 11-year sentence for Nicko Widjaja, the former chief executive officer of BRI Ventures, a venture capital firm owned by state-owned PT Bank Rakyat Indonesia. The charges relate to an investment in agritech start-up TaniHub, which later ran into financial trouble. Widjaja denies wrongdoing. His lawyers say the investment went through the necessary legal reviews and Widjaja did not personally gain.

“Since the end of Jokowi’s administration, Indonesia’s legal system has become politicised,” said Nicky Fahrizal, a researcher at the Jakarta-based Center for Strategic and International Studies, referring to former president Joko Widodo. “What concerns business actors most is legal certainty. The Nadiem case could become a real example that those unwilling to cooperate with those in power may be targeted.”

See also: Indonesian officials vow again to stabilise rupiah, draw funds

Makarim rose to prominence a decade ago as the driving force behind Gojek, a “super app” that transformed Indonesian urban living. From a simple call centre booking motorbike taxis, known as ojeks, he helped build his start-up into a US$10 billion company which attracted investment from Google to Tencent Holdings Ltd and catapulted him into global corporate fame.

His boldness drew the attention of Jokowi, who in 2019 appointed him as the minister of a broad portfolio encompassing education, culture and science, with orders to make sweeping change. But the skills that made Makarim successful in business — his impatience with the status quo and disregard for tradition — made him enemies in the bureaucracy.

“I felt like a lot of the old powers in the ministry felt disenfranchised,” he said. “And that is not withstanding all the tech that we built.”

He scrapped the national exam, arguing that it promoted rote memorisation at the expense of learning. He gutted the ministry's seniority-based promotion queue to fast-track young teachers into leadership roles. He allowed university students to exchange semesters of campus coursework for corporate internships.

Makarim, who is married and has four children, attributed his policies to a desire to improve prospects for the country’s millions of students.

“I joined this government at the request of President Jokowi, leaving behind a career I had spent years building,” he said. “I did it because I believed I could make a difference for Indonesian children and for the future of education in this country.”

To achieve his goals, Makarim brought in a group of young advisers, consultants and technology specialists, which the prosecution referred to as the shadow team. Senior officials were pushed aside. Critics argued it was moves like these that showed the tech founder failed to understand the reality of the political arena.

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“The Nadiem case is a consequence of appointing a minister who, in my view, was not suitable,” said Yenti Garnasih, a law lecturer at Trisakti University in Jakarta. “Nadiem is not an education figure, he is a businessman. People should not be placed in roles that do not match their expertise.”

Less than a year after Jokowi’s administration ended in October 2024, Makarim was arrested in relation to a corruption probe related to the Chromebooks order conducted by the Attorney General's Office. His trial began in January. Former Google Asia-Pacific president Scott Beaumont testified that there was no connection between the US tech giant’s investment in Makarim’s former company and any conversations with the Education Ministry.

In his final plea on June 2, Makarim said he should be acquitted because the hearing showed “there is no element of state financial loss, no element of unlawful act, no element of enriching oneself, others, or a corporation, and no mens rea or malicious intent”.

So far three people have been convicted and jailed for terms ranging from four to four and a half years in connection with the procurement, including two former directors of schools at the Education Ministry. A former IT consultant was given four years, with the judges split 3-2 on the decision.

Reflecting on his time in government and the events that followed, Makarim said in March he was aware of the risks before accepting the Cabinet position.

“I am still very happy that I took that risk,” he said from hospital. “I am heartbroken that I am separated from my family, but I still love my country and I don't regret that decision to join.”

Prabowo hasn't publicly commented on Makarim’s case. Speaking broadly upon judicial independence in an interview in March, he said he doesn’t interfere in legal cases. “I’ve allowed the attorney general to do their job,” he said.

Members of Makarim’s family, whose social ties to Prabowo's family stretch back decades, have met with the president to discuss the case but without resolution, people with knowledge of the meetings said, speaking on condition of anonymity.

A narrow source of hope is the case of Thomas Lembong, a former trade minister who was jailed in July 2025 for four and a half years over a policy decision allowing private companies to import sugar during his 2015-2016 tenure. Weeks after his sentencing, Prabowo pardoned him as part of a mass amnesty.

Lembong has criticised Makarim’s case, saying the legal basis for the case was “too absurd” and a guilty verdict would impact investor sentiment towards the country.

“Given our fiscal condition, the global situation, and our balance of payments being affected by the Iran crisis, we desperately need international investors,” Lembong said on a podcast. “We should not allow their confidence in us as an investment destination to decline.”

For Makarim, the high achiever who once had the world at his feet, there is regret he failed to navigate Jakarta’s corridors of power successfully.

“There were many things that I could have done better. I think that this experience has taught me that I completely underestimated the value of really building stronger political ties,” he said. “I was naive on that point.”

But there is also bitterness at his fate.

“It really sends a signal that people who are willing to make big changes and reform, and who are fighting corruption within the administration, can be easily framed and sidelined,” Makarim said while being escorted to the courtroom on May 11. “This trial will decide whether justice still exists in Indonesia.”

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