JAKARTA - The handling of the law against the former President Director of PT BRI Ventura Investama (BVI), Nicko Widjaja, is considered potentially having a negative impact on the national investment climate.
Academic circles assess that the approach that associates investment losses with criminal acts can create uncertainty in business decision-making.
IPMI International Business School Professor of Finance and Investment, Prof. Roy Sembel, said that the character of venture capital business does contain a high level of risk. In this business model, not all investments end successfully and generate profits.
"In the venture capital world, more than half of the investments may not be in line with initial estimates. Of 10 investments, perhaps only three will generate profits and are expected to be able to cover losses from other investments," said Roy in a written statement, Thursday, June 11.
According to him, the success of an investment cannot be judged only from the final result.
Most importantly, he continued, ensuring that all investment processes are carried out in accordance with good governance principles, ranging from due diligence, risk analysis, to investment approval mechanisms.
Roy assessed that criminalization of investment losses could lead to risk averse behavior among investors and fund managers.
This condition has the potential to hinder the birth of innovation and the growth of start-up companies, which have been the main targets of venture capital funding.
For information, Nicko Widjaja is currently a defendant in a case of alleged corruption related to BVI investments in the TaniHub Group.
The prosecutor demands Nicko with a sentence of 11 years in prison and a fine of Rp. 1 billion.
Roy reminded that the impact of the case could extend to the national investment ecosystem.
According to him, business actors and investors can be more careful and even reluctant to take business risks that are actually needed to encourage economic growth.
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