When Good Faith Gone Bad: The ASDP Verdict's Chilling Effect

The Corruption Court convicted ASDP’s former directors of corruption for a business acquisition that, by most accounts, was strategically sound. The dissenting judge recognized what should be obvious: this was a business decision, albeit imperfect, made in good faith. Yet the majority disagreed, and now these executives face over four years in prison.

The immediate question is whose fault this is. The prosecutors? No. They’re operating within the legal framework they’ve been given, doing exactly what we’ve asked them to do in a country where corruption has long been endemic.

The law itself? Perhaps. Indonesia’s anti-corruption laws were intentionally drafted with broad flexibility to catch the genuinely corrupt. But that same flexibility has created a legal minefield where the boundary between a bad business decision and a criminal act has become dangerously unclear.

Here’s the real problem. We’re effectively saying that compliance with process matters more than outcomes, and that business judgment made in good faith offers no protection if things don’t pan out perfectly. This fundamentally misunderstands how business works. The Business Judgment Rule exists in corporate law precisely to shield directors who act in good faith, even when their decisions yield suboptimal results. Without this protection, who will make the bold, strategic calls that SOEs desperately need?

Think about it from a talented professional’s perspective. You could take a lucrative private sector role where business risks are just that, business risks. Or you could join a state enterprise where the same risks might land you in prison, even if you acted with complete integrity and ultimately benefited the state. The choice is obvious, and it’s not the one Indonesia needs its best minds to make.

This isn’t about letting corruption slide. Genuine corruption, fraud, and self-dealing should absolutely be prosecuted to the fullest extent. But we need legal clarity that distinguishes between malfeasance and legitimate business judgment. Right now, we don’t have it.

The dissenting judge warned that this verdict will make top professionals think twice before serving in government or SOEs. I’d go further. They won’t just think twice. They’ll decline altogether. And who will replace them? Either those with less to lose or those willing to avoid any decision that carries even minimal risk. Neither option serves Indonesia’s interests.

We’re at a crossroads. We need robust anti-corruption enforcement AND we need world-class talent running our state enterprises. These objectives shouldn’t be in conflict, but this verdict puts them directly at odds.

And right now, that signal is crystal clear: stay away. []

The writer is a legal professional and former managing partner of one of Indonesia’s largest law firms. He is now CEO and Co-Founder of an AI tech company and a millennial who remains deeply concerned about his country’s future.