In practice, criminal reports against directors and business owners rarely arise while a business is still operating.
They more often emerge after the business has failed, a project has ended, or a commercial relationship has broken down.
This pattern is not accidental. It reflects how disputes, incentives, and legal exposure actually unfold-especially under Indonesia’s new Criminal Code effective in 2026.
This article explains why criminal reports surface late, who typically files them, and what this means for directors and boardrooms.
1. Criminal Law Is Usually Not the First Weapon
While a business is still running:
- Parties remain economically dependent on each other
- Relationships are maintained, even if strained
- Problems are framed as “commercial” or “internal issues”
Criminal law is typically seen as too disruptive at this stage.
Once the business ends, however:
- Economic dependency disappears
- Trust collapses
- The search for accountability begins
At that point, criminal law becomes a viable option.
2. After the Business Ends, Restraints Disappear
During an ongoing business relationship, many parties hesitate to act because:
- They still hope the project will continue
- They fear retaliation or loss of position
- They remain contractually or professionally tied to management
After the relationship ends:
- There is nothing left to lose
- No relationship to preserve
- Criminal reporting becomes a tool of last resort
This explains why reports often surface months or even years later.
3. Who Commonly Files Criminal Reports After the Business Ends?
a. Former Employees or Executives
This is one of the most common sources, especially following:
- Contentious terminations
- Unresolved compensation disputes
- Corporate restructuring or shutdowns
Former insiders often possess:
- Internal documents
- Knowledge of decision-making processes
- A narrative of “negligence” or “deliberate inaction”
b. Failed or Terminated Business Partners
Typical examples include:
- Joint venture partners
- Distributors whose contracts were terminated
- Subcontractors left unpaid or partially paid
Civil disputes frequently escalate into criminal allegations when:
- Civil remedies appear slow or ineffective
- Bargaining power is perceived as weak
c. Minority Shareholders
After losses materialize:
- Board decisions are scrutinized retrospectively
- Commercial judgment is reframed as mismanagement
The focus shifts from results to:
- How decisions were made
- Whether risks were ignored
- Whether authority was abused
d. Regulators and Supervisory Authorities
In many sectors:
- Regulatory findings arise after operations conclude
- Post-project audits uncover potential violations
In such cases, criminal processes may begin without any private complainant.
4. Why Directors Are Often Caught Off Guard
Many directors genuinely believe:
- “This was a business decision”
- “There was no bad faith”
- “Everyone agreed at the time”
The problem is that criminal assessment does not stop at intent.
Under the new regime, scrutiny extends to:
- Negligence
- Omission
- Failure to act despite known risks
What once looked like acceptable risk-taking may later be examined as governance failure.
5. Enforcement Focus: Process, Not Profit or Loss
In most corporate criminal cases, enforcement authorities ask:
- Were risks identified and discussed?
- Were warnings escalated or ignored?
- Was there a reasonable information basis?
- Was compliance sidelined or overridden?
Business losses alone do not create crimes.
Deficient decision-making processes increasingly do.
6. The Core Boardroom Lesson
The key principle directors must internalize is this:
Criminal exposure often arises from past decisions that once seemed settled and irrelevant.
Boards should assume that:
- Decisions may be reviewed years later
- By parties with hostile interests
- In the context of a failed or concluded business
7. Protection Comes from Governance, Not Silence
Directors cannot control:
- Who will become dissatisfied
- Who will file a report
- When scrutiny will begin
What can be controlled is:
- Decision-making discipline
- Proper documentation
- Clear risk escalation
- Meaningful involvement of legal and compliance functions
Closing Perspective
Criminal reports against directors rarely emerge while the business is alive.
They emerge when:
- Economic ties are gone
- Relationships have collapsed
- Internal records are reread through a criminal lens
Under the 2026 Criminal Code, the most important question for directors is no longer:
“Has anyone reported us yet?”
But rather:
“If someone reports us years from now, can our decisions withstand criminal scrutiny?”
Where appropriate, we can:
- Assess post-business criminal exposure for directors
- Review historical board decisions from a risk perspective
- Help build decision trails that remain defensible over time
Law, beyond borders.