When German national Gordon Hild and his Indonesian wife Ismayanthi invited another couple to invest in the expansion of their resort property in Bali, they could not have imagined the nightmare that would unfold.
Hild (41) and Ismayanthi (46) both served 22 months in jail after being convicted of fraud and embezzlement. They were released in February 2020 after the Supreme Court ruled that although they were “proved as having committed such act as charged” against them, “it was not a criminal act”.
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Almost 10 years ago, Hild and Ismayanthi in August 2010 opened Kelapa Retreat and Spa in Pekutatan village, situated by secluded black sand beaches on the southwest coast of Bali. The luxury boutique hotel initially had just eight units and a restaurant.
In 2011, Hild and Ismayanthi invited Australian businessman Craig Curtis and his Indonesian wife Yenny Sunaryo to invest in a major expansion of the resort, to be known as Villa Kelapa Retreat II.
After a meeting in Pondok Indah, South Jakarta, Sunaryo made a series of transfers to Ismayanthi’s bank accounts, from 2013 to 2015, totalling Rp8.5 billion (then equivalent to about US$714,000).
Sunaryo and Curtis subsequently complained that a promised partnership company agreement was cancelled, so they initiated legal action, accusing Hild and Ismayanthi of misusing their money to buy a property in New Zealand.
Hild and Ismayanthi went on trial separately at the South Jakarta District Court in November 2016. Judges ruled that fraud had occurred because the resort had been expanded and was earning a profit, whereas Sunaryo’s investment money had been misused and was not repaid.
In February 2017, the court sentenced Hild to three years in jail and Ismayanthi to 2.5 years in jail. They first appealed to Jakarta High Court, which upheld their sentences. Next, they appealed to the Supreme Court, which rejected their appeal in August 2017. The court instead increased Ismayanthi’s sentence to 3.5 years in jail and kept Hild’s sentence at three years.
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Despite losing those appeals, the couple managed to live at a villa in Petulu village in Ubud, Bali, as they were allegedly suffering poor health. They were eventually arrested in April 2018, flown to Jakarta and sent to prison.
The couple’s attorneys filed another judicial review to the Supreme Court in October 2019. This time, they succeeded in having the previous verdicts of Jakarta High Court and the Supreme Court overturned. The Supreme Court in February 2020 ordered their immediate release from jail, the rehabilitation of their rights and dignity, and charged all costs of the case to the state. In a nutshell, the judges ruled the couple’s past actions related to the disputed investment could not be deemed fraud, embezzlement or any other criminal offence.
The disputed fund is now apparently the object of civil court proceedings between the two parties.
There are a few lessons to learn from this saga. First, if you do end up being sentenced to jail by an Indonesian district court and decide to appeal, know that your sentence can be extended by higher courts.
Even if you lose your initial appeals to the High Court and Supreme Court, it may be worth making a final appeal for a judicial review, especially if you’re backed by a legal team experienced in navigating the nuances of the highest levels of the Indonesian legal system.
Second, if you’re thinking of investing in a resort development partnership in Indonesia, make sure you have precise and valid terms and conditions in a written agreement, which should be finalised before the project begins and before you transfer any funds. If you start investing in a project while the paperwork is still being drawn up, you could be getting into trouble.
The acquittal of the Hild and Ismayanthi was welcome news to the dozens of staff of Kelapa Retreat and Spa. The resort had been sealed off at times by authorities. The owners and other shareholders are now keen to further improve the reputation of the luxurious resort, which enjoys an average 5-star average rating based on 330 reviews TripAdvisor.com.
Some 60 employees had previously campaigned to the local legislative assembly against the temporary closure of the resort, warning that such action not only threatened their livelihoods but could also damage Bali’s image as a tourist destination.
As Indonesia begins to ease some coronavirus mitigation restrictions, Bali is planning to reopen its tourism industry in July. So if you’re keen for a break at a luxury resort with rave reviews and interesting past, why not contact Kelapa Retreat and make a deal for a stay at one of their 23 spacious private villas. Paradise has not been lost, merely postponed and is now ready for resumption.