The Jakarta High Prosecutor’s Office has detained the beneficial owner of FMCG distributor PT Rukun Mitra Sejati (RMS) in a probe connected to allegations of irregular loan disbursement by the state-owned Bank Rakyat Indonesia (BRI) via the fintech platform KoinWorks between 2020 and 2024.
The owner, LHL (aka Ko Xiong), has been named as a suspect in the case involving approximately 600 billion rupiah ($33.2 million) in loans disbursed through KoinWorks. RMS was one of KoinWorks’ borrowers and had also obtained financing from other lenders like AwanTunai.
The Jakarta prosecutor’s office said LHL would be detained for an initial 20-day period. He is currently being held at a correctional facility in Malang and will later be transferred to Jakarta.
According to investigators, LHL allegedly manipulated loan applications submitted to BRI through KoinWorks by using nominee borrowers, including current and former employees of RMS. Prosecutors allege that the loan proceeds were subsequently used for purposes other than those stated in the applications.
Prosecutors also alleged that KoinWorks executives facilitated the financing despite inadequate credit assessments, while loan applications were supported by manipulated invoices and lacked proper insurance coverage. Authorities say this resulted in losses to the state exchequer and are pursuing charges under Indonesia’s anti-corruption laws and provisions of the revised Criminal Code.
Earlier this year, DealStreetAsia reported that RMS had sought court-supervised debt restructuring after failing to meet obligations to creditors. Court filings showed the company owed liabilities to a wide range of creditors, including banks, suppliers, and fintech lenders.
The detention of LHL marks an expansion of the investigation to include borrower-side parties and follows the detention in early May of three executives of KoinWorks. Prosecutors had previously named BAA, KoinWorks’s operations director; BH, its former president director; and JB, its current president director, as suspects in the case.
Prosecutors said they have seized more than 14 billion rupiah in assets as part of the investigation and are continuing to examine evidence related to the involvement of BRI personnel and borrowers who allegedly manipulated loan applications. Investigators are also tracing additional assets in an effort to increase recoveries for the state.
In October 2025, the Surabaya Commercial Court granted a creditor’s petition to place PT Rukun Mitra Sejati under a temporary debt payment suspension (PKPU), giving the company 45 days of court protection while it negotiated a restructuring with creditors under the supervision of court-appointed administrators.
