Prosecutors Highlight Alleged Use of Foreign Shell Companies to Control Land in Central Lombok

The Central Lombok District Attorney’s Office (Kejari) has highlighted the alleged use of foreign investment (PMA) shell companies to control land within tourist zones. This practice is viewed as having the potential to transform investment into a speculative instrument, while simultaneously eroding regional revenue.

In addition to the suspected use of PMA shell companies, the prosecutor’s office also noted the disparity between the Tax Object Sale Value (NJOP) and market land prices, as well as the concentration of nearly 80 per cent of land transactions among a small group of notaries and Land Deed Officials (PPAT).

Alfa Dera, Head of the Intelligence Section at the Central Lombok District Attorney’s Office, stated that land control patterns are currently shifting. While previously such practices were conducted through nominee schemes using Indonesian citizens’ names, there are now allegations of using PMA shell companies that do not engage in any real investment activities.

“Companies are established, but their investment activities are invisible. Instead, land is being controlled in anticipation of price increases. This pattern requires collective attention to ensure that investment does not shift into mere speculation,” Dera said in Praya on Saturday (1/8/2026).

Dera also highlighted the gap between the NJOP and market prices in several tourist areas. According to him, some land has a market price of approximately Rp2 million per square metre, whereas the NJOP remains around Rp20,000 per square metre.

“This vast difference needs to be evaluated. When market prices rise sharply but the NJOP does not move proportionally, the potential for regional revenue is impacted,” he noted.

However, he emphasised that any adjustment to the NJOP must not burden low-income communities. Evaluation should focus on high-value land controlled by business entities or corporations, while farmers, fishermen, MSME owners, artisans, and local homestay owners must continue to receive protection.

During a legal seminar held at Poltekpar Lombok on Friday (31/7), attended by village heads and Central Lombok Regency officials, the prosecutor’s office also discovered unusual land transaction patterns.

“Based on gathered data, almost 80 per cent of land transactions are concentrated among no more than seven Notaries or PPATs. In fact, one Notary is reported to handle nearly 40 per cent of all land transactions in Central Lombok,” he explained.

Dera stated that while these conditions do not immediately indicate legal violations, they warrant scrutiny to ensure all transactions remain transparent, competitive, and in accordance with statutory regulations.

“We remind business entities not to use companies as a means to disguise beneficial ownership for the purpose of controlling land. The principle of prudence must guide every Notary and PPAT in exercising their authority,” he concluded.