Business Ethics Violations PT. Jiwasraya

Fraud is not measured by a country's progress or business success. A company's internal controls are critical to business crime (Snchez-Aguayo et al., 2021). Misconduct is an unethical act committed in various cleverly planned ways to take advantage of others (Syofyan, 2021). Perpetrators can find and take advantage of organizational weaknesses in some situations to commit fraud. Since fraud occurs by human intent, understanding the motivations and characteristics of the perpetrator can help detect possible fraud. Currently, fraud still occurs a lot in Indonesia, and some of them cause huge losses to the state. One of the evidence or parameters used by various parties to assess performance is financial statements.

Around mid-2018. It was later discovered that the financial statements prepared by the company's new directors were false. This crime has been going on for a long time. After an audit by the audit board of Indonesia in 2006, it was reported that the company had a deficit of IDR 3.29 trilion. As a result, the auditors refused to give their opinion on the 2006-2007 financial statement because the information on the reserves was unreliable. In the same year, the company's equity continued to decline, reaching IDR 5.7 trilion in 2008 and IDR 6.3 trilion in 2009. In 2010-2012, the company continued to implement the insurance program, and by the end of 2011, managed to record a positive figure of IDR 1.3 trilion

Since 2014, the company has taken a strange turn. The company continued to provide sponsorship to Manchester City FC despite their financial problems. In 2018, Asmawi Syam served as Jiwasraya's managing director and finance director and reported the strangeness of the company's financial statements to the Ministry of SOEs. PwC's results of the 2017 financial statements being changed from a profit of IDR 2.4 trillion to IDR 428 billion is proof of this. In August 2018, the SOE minister invited directors to investigate the company's possible failure to pay customers. After publicly announcing that it could not pay JS Saving Plan overdue policy claims amounting to IDR 802 billion in October 2018, the company came to public attention due to financial problems. As a result, shareholders appointed Hexana Tri Sasongko to replace Asmawi Syam as managing director. To meet the 120 percent solvency ratio, the company needs funds of IDR 32.89 trillion with assets of only IDR 23.26 trillion and liabilities of IDR 50.5 trillion.

In the jiwasraya case, the state suffered a loss of IDR 16.81 trilion. On march 9, 2020, the investigative audit report on the calculation of state losses on the financial management and investment funds of jiwasraya from 2008 to 2018 was sent to the office of the attorney general of the republic of Indonesia.

The Jiwasraya Insurance LLC scandal seems to have been handled by Rini Soemarno as the Minister of SOEs. Rini was asked to join the government bureaucracy after experiencing difficulties in the business world. This was her first experience. She was appointed Deputy Head of Jakarta's National Banking Restructuring Agency (IBRA) in 1998. Since then, she started to get involved more frequently in government matters. After the election of President Megawati, Dini was appointed Minister of Industry and Trade in the Gotong Royong cabinet (2001-2004).

The jiwasraya insurance LLC case continues in 2021. The six defendants in the case are Benny tjokrosaputra, Heru hidayat, Hendrisman Rahim, Hary prasetyo, syahmirwan, and Joko Hartono tirto. Hary prasetyo was sentence because of the fraud activity, who served as jiwasraya's finance director from January 2013 to 2018, hendrisman Rahim, who served as jiwasraya's finance director from 2008 to 2018, joko Hartono tirto, who served as director of LLC maxima integra, and syahmirwan who served as jiwasraya,s former head of investment and finance division

Defendant Benny Tjokrosaputro, President Director of Hanson and President Commissioner of LLC Trada Alam Minera, in addition to facing life imprisonment and fines, must also return the money lost to Bentjok amounting to IDR 6.078 trillion and Heru amounting to IDR 10.72 trillion

The case of Jiwasraya Insurance LLC happen because there were several factors that caused the case to occur such as internal pressure to achieve high profit targets, weaknesses in corporate governance, high-risk investments, and the involvement of outside parties. This case provides valuable lessons for all related parties, especially in terms of financial industry supervision and the importance of implementing good corporate governance principles.