PT Telekomunikasi Indonesia, an Indonesia-based telecommunications company with American Depositary Receipts traded in the U.S., recently disclosed in this SEC filing.
“In October 2023, the Company received a document request from the U.S. Securities and Exchange Commission (“SEC”) as it relates to Telkominfra’s involvement in a project with the Indonesian Information and Telecommunication Accessibility Agency of the Ministry of Communication and Information (“BAKTI Kominfo”) regarding the provision of 4G Base Transceiver Station (“BTS”) infrastructure.”
The disclosure further states:
“The SEC has since expanded its investigation to include accounting and disclosures issues relating to our revenue recognition and financial reporting practices and internal control over financial reporting, as well as public reports regarding certain Indonesian legal proceedings involving our Company, various subsidiaries and affiliates, and certain of our clients and suppliers. Beginning in May 2024, the Company also received additional requests for information from the U.S. Department of Justice (“DOJ”) focused on compliance with the U.S. Foreign Corrupt Practices Act (“FCPA”). Each U.S. authority is aware of the other agency’s investigation. The Company is cooperating with the U.S. authorities and has retained outside counsel to conduct an internal investigation into these issues. The Company cannot predict the duration, outcome or impact of these investigations on our business or whether they will have a material impact on the Company’s audited consolidated financial statements. Furthermore, in February 2025, the U.S. administration issued an executive order titled, “Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security,” pausing the DOJ’s enforcement of the FCPA for 180 days (which period can be renewed an additional 180 days) until the U.S. Attorney General issues revised FCPA enforcement guidance. Due to the changing nature of and uncertainties related to the regulatory environment, we cannot be certain if or how the DOJ’s enforcement of the FCPA will change or its impact on the outcome of the DOJ’s investigations on our business. It is additionally uncertain whether our Company, affiliates, employees, agents, or contractors would meet the requirements of any individualized exception to the FCPA enforcement moratorium. Furthermore, while an investigation or inquiry by the SEC or DOJ should not be construed as an indication by the SEC or the DOJ that any violation of law has occurred, nor as a reflection upon any person, entity or security, publicity surrounding the foregoing, any SEC or DOJ enforcement action or settlement as a result of these investigations, even if ultimately resolved favorably for us, could have an adverse impact on our reputation, business, prospects, financial condition, and results of operations.
We are also cooperating with and have in certain instances self-reported various matters involving alleged or potential violations of Indonesian laws and regulations by our business units and subsidiaries and affiliates, including anti-corruption, alleged fraud, embezzlement and issues associated with accounts receivable, some of which are related to the above-described matters investigated by the SEC and the DOJ, to government authorities in Indonesia, including the Indonesian National Police, Public Prosecution Service and Corruption Eradication Commission. The length, scope or results of these self-disclosures and proceedings, or their impact on our results of operations, business or financial condition remain uncertain.
Any actual or perceived outcomes of these matters that are adverse to us could result in negative publicity, legal proceedings and/or regulatory actions that could damage our reputation, discourage current or potential business partners and customers from doing business with us, and subject us to claims, fines, damages and lawsuits, any of which could have material and adverse effects on our business, results of operations and financial condition.”
