INA and SRF Win Arbitration Dispute Against Kimia Farma
After nearly two years, the business dispute between the Indonesia Investment Authority (INA) and Silk Road Fund Co Ltd (SRF) against PT Kimia Farma Tbk (KAEF) and PT Kimia Farma Apotek (KFA) at the Singapore International Arbitration Centre (SIAC) has reached a resolution. The dispute, concerning investment funds and costs valued at Rp 2.2 trillion, was brought to the SIAC on 23 October 2024.
Three sources from State-Owned Enterprises and the government stated that the Singapore arbitration court ruled in favour of INA and SRF in this dispute in mid-June 2026. The dispute originated from misstatements in the 2021 and 2022 financial reports of KFA, as well as the financial reports of PT Kimia Farma Diagnostik (KFD). Consequently, PT Bio Farma (Persero) and KAEF are jointly liable to return the funds and investments of INA and SRF, amounting to approximately Rp 2.2 trillion, as they acted as guarantors in this dispute.
Putri Dianita Ruswaldi, VP of Communication at INA, declined to comment on the arbitration decision. The President Director of KAEF, Djagad Prakasa Dwialam, and the Corporate Communications lead of PT Bio Farma (Persero), Yuni Miyansari, did not respond to requests for confirmation.
On 5 February 2026, the Audit Board of Indonesia (BPK) reported in its first semester 2025 report that PT Bio Farma (Persero), the holding company for state-owned pharmaceutical enterprises, potentially faced the obligation to return investment funds and costs to INA and SRF due to these misstatements. This BPK finding was detailed in the “Compliance Audit Report on the Management of Revenue, Expenses, and Investment Activities for 2022 to Semester I 2024 at PT Bio Farma (Persero), Subsidiaries, and Related Agencies in Jakarta and West Java”.
In its report, the BPK explained that INA’s subsidiary, PT Akar Investasi Indonesia (AII), and CIZJ Limited, a subsidiary of SRF, sent a letter to Kimia Farma on 24 June 2024. The letter cited violations of the conditional share subscription and purchase agreement (CSSPA) signed by the parties at the start of the investment in 2022. These misstatements potentially led INA and SRF to make erroneous investment decisions on 13 November 2022 through rights issues, divestments, and the issuance of mandatory convertible bonds (MCB) to KAEF and KFA.
In addition to the civil dispute, on 25 September 2025, reports emerged regarding the complications of this corporate action, specifically the steps taken by the Attorney General’s Office to investigate alleged corruption involving these investment funds since early 2026. The investigation was marked by the issuance of an Investigation Order from the Director of Investigation of the Junior Attorney General for Special Crimes, Number Print-6/F.2./Fd.1/03/2025, in March 2025, concerning alleged corruption of investment funds amounting to Rp 1.86 trillion. When contacted on 4 February 2026, the Head of the Legal Information Centre of the Attorney General’s Office, Anang Supriton, stated that the investigation into the case is ongoing.
Responding to the corruption investigation, the Acting Director of Finance & Risk Management, Disril Revolin Putra, stated that KAEF complies with applicable laws and regulations. “The company also remains cooperative with the competent authorities in accordance with the principles of good corporate governance,” he stated in a disclosure to the Indonesia Stock Exchange on 11 September 2025.
In a previous statement, the Corporate Secretary of Bio Farma, Bambang Heriyanto, expressed optimism that the Attorney General’s Office would work professionally and according to the principles of justice. Therefore, Bio Farma is prepared to cooperate with the Attorney General’s Office if further information is requested. “Bio Farma affirms its support for anti-corruption efforts and is ready to cooperate fully with the authorities,” he said.
Member of Commission VI of the House of Representatives (DPR), Herman Khaeron, welcomed the law enforcement’s steps to investigate the alleged corruption at Kimia Farma. He noted that Kimia Farma should be a fiscal contributor to the state, given its thousands of pharmacies and infrastructure spread across Indonesia. However, the pharmaceutical company continues to incur losses. “There is significant leakage. Investigate it thoroughly to the very roots,” said the Secretary General of the Democratic Party at the Parliament Complex, Senayan, on Thursday, 4 September 2025.