State-Owned Enterprises Minister Erick Thohir said on Wednesday that Asabri’s Rp 10 trillion (US$732.18 million) investment mismanagement is not affecting its liquidity.

“I assure you that Asabri is fine. Its cash flow and assets are all good, unlike Jiwasraya,” he said at the Presidential Palace in Jakarta, referring to another state-owned insurance company, Jiwasraya, that is mired in financial losses after failing to pay out on matured policies.

Asabri has been in the spotlight as its stock portfolio plunged by more than 95 percent last year. Some of the stocks in the insurer’s portfolio were similar to those of the ailing Jiwasraya that were deemed “low-quality stocks” by the Supreme Audit Agency.

The stocks include those of businessman Benny Tjokrosaputro’s property firm, PT Hanson International, and Heru Hidayat’s agribusiness, PT Inti Agro Resources, both of whom were arrested by the Attorney General’s Office over their involvement in Jiwasraya’s case of alleged corruption.

The government would not inject funds into Asabri, Erick said, adding that Asabri would still be able to pay claims to its policyholders, which consist of National Police officers, the Indonesian Military and employees of the Defense Ministry. The insurer is guaranteed by the Finance Ministry, he added.

The investment mismanagement that led to Asabri’s losses was caused by the insurer’s failure to implement good corporate governance (GCG) principles, Erick said.

“[Like] Garuda and Jiwasraya, it all leads to problems in implementing proper GCG principles,” he added. He referred to flag carrier Garuda Indonesia’s case in which its top executives were allegedly smuggling disassembled Harley Davidson motorcycle and upmarket Brompton bicycles on board a new Airbus A330-900 that was delivered from France in November 2019.

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