Former Economy Minister Datuk Seri Rafizi Ramli has questioned the due diligence process undertaken before the Retirement Fund Incorporated (KWAP) invested in Indonesian aquaculture startup eFishery, arguing that the company’s cash flow statement should have been the key document in verifying its financial health.
Drawing on his experience as an auditor, Rafizi said every government-related scandal he had uncovered began with examining three core financial statements — the income statement, balance sheet and cash flow statement.
According to him, while the income statement and balance sheet may present a healthy financial position on paper, the cash flow statement ultimately determines whether the reported profits are backed by actual cash received.
“If a company reports strong profits, there is only one thing to check — whether the money actually came in and whether the cash flow matches the reported profits,” he said.
Rafizi said revenue generated through fabricated invoices or manipulated figures would not be reflected in the cash flow statement.
“The income statement can say whatever it wants. The balance sheet can say whatever it wants. But cash flow? When an invoice is fabricated, the money was never there,” he said.
He stressed that reviewing the cash flow statement was not a complex forensic exercise but a fundamental audit procedure that should be among the first areas examined by auditors.
Rafizi also questioned how the due diligence exercise was carried out before KWAP approved its investment in eFishery.
“I just want to know how the due diligence was conducted, how the auditors verified these figures, and what exactly they found before the investment was approved,” he said.
His remarks come as KWAP’s investment in eFishery remains under scrutiny following allegations of financial irregularities and misstatements at the Indonesian startup.
