suharto family empire in 35 yrs

The Suharto family empire

TANRI ABENG, Bintang Beer, Bata Shoes & Freeport Shares
By George J. Aditjondro

The Wall Street Journal of 18 March, quoted Suharto's New Minister of
Social Affairs (and eldest daughter) Siti Hardiyanti Rukmana, responding to
the question why Indonesia does not force cabinet ministers to declare
their wealth publicly. Mrs. Rukmana, a prominent businesswoman, responded:
"In our religion, it's not good to announce how much wealth we possess."

This must certainly apply  to Suharto's new minister for relations with
state companies, Tanri Abeng, who obtained his MBA from the State
University of New York in 1968, who still hols top positions in various
large companies. Without forcing his ministers to publicly declare their
wealth, including their shares and positions as directors or commissioners
in all sorts of business enterprises, it is unclear how Suharto will deal
with the potential of conflict of interests of his ministers.

First of all, he is the President Director of PT Bakrie & Brothers, a large
conglomerate controlled by Aburizal, Nirwan, and Indra Bakrie, whose
chairman, Aburizal Bakrie is currently also the head of the Indonesian
Chamber of Commerce and Industry (KADIN).

As president director of Bakrie & Brothers, Tanri Abeng, who joined B & B
in 1989, controlled over Rp 5.2 trillion worth of assets in 1996. This
includes B & B's 4.5% of shares in the Indonesian subsidiary of Freeport
McMoRan, after B & B had to part with another 4.5% shares taken over by Bob
Hasan on behalf of Suharto's Nusamba Group.

In his capacity as president director of Bakrie & Brothers, Tanri Abeng is
also a commissioner in PT Bakrie Finance Corporation, which had nearly Rp 1
trillion worth of assets in 1996.

The Bakrie & Brothers Group, is practically the only non-Chinese business
group which successfully survived the transition from the Sukarno period to
the Suharto period. The secret to this was the close links which Bakrie
Senior build with Ibnu Sutowo, then corrupt president director of
Indonesia's state oil company, Pertamina, and Ir Tungku Aribowo,  the also
corrupt director of Indonesia's steel company, PT Krakatau Steel (Tungky
has since held several Minister positions in Suharto's cabinet, and is a
director in Tommy Suharto's car racing company). Then, after Ibnu Sutowo
was finally disposed by Suharto in 1976, after gracefully getting off the
hook despite burning a ten billion US dollar hole in Indonesia's national
coffers, the Bakrie Brothers assisted the Suharto family -- Sudwikatmono,
Bambang Trihatmodjo, and Indra Rukmana -- to sell Pertamina crude oil from
various Bermuda, Vanuatu, and Hong Kong registered companies.

>From these joint ventures in the early 1980s emerged numerous other joint
ventures between the Bakrie and Suharto families,  ranging from the rubber
and oil palm plantations in Sumatra and Kalimantan, a 50,000 cattle ranch
in Australia's Northern Territory assisted by veterenarians from Suharto's
Tapos ranch in West Java, their Nusa Bank, their Goro-Gelael supermarket,
their aircraft leasing company with Tommy Suharto and Robby Djohan which
nearly bankrupted the smaller Indonesian state-owned Merpati Airlines, and
their mega-projects with Tititek Prabowo (Tanjung Jati A power plant in
Central Java) and Tutut (Jakarta triple decker/Manggarai project).

Outside the Bakrie Brothers business empire, Tanri Abeng is also a
commissioner of PT Sepatu Bata, the Indonesian subsidiary of the
Toronto-based Canadian shoe company, Bata. In 1996, this subsidiary
produced 15 million pair of shoes a year, under the brand names Bata,
Power, North Star, Marie Claire, and Bubblegummers. Of that amount, 326,000
pairs were exported in 1996 to ten countries in the world.

Then, Tanri Abeng's third business empire is PT BAT Indonesia, the 70%
owned subsidiary of British-American Tobacco Company, where he is the
president commissioner. It produces cigarettes under the brand names of
Lucky Strike, State Express, 555, Kent, Benson & Hedges, Ardath, Commodore,
and Escort. This Indonesian subsidiary of BAT has also set up a joint
venture in Cambodia, to produce the Fortune, Ara, and Victory brands, with
a US$ 13 million investment, which is scheduled to start operation this
year, 1998.

Finally, Tanri Abeng's oldest business skill is in selling beer, especially
the famous Bintang brand loved by Aussie tourists in Bali. PT Multi Bintang
Indonesia is the largest beer producer in Indonesia, which is 76% owned by
the Dutch Heineken Beer company. Tanri Abeng, himself a Muslim originating
from South Sulawesi who is prohibited from drinking alcohol, is currently
still the president commissioner of this company.

So, in conclusion we see here one of Indonesia's top entrepreneurs, with
excellent business ties with the US, Canadia, the Netherland, and other
countries, being put in charge of solving the inefficient Indonesian state
companies. How will he solve those inefficiency problems? Selling all the
state mining companies to Freeport McMoRan? Selling all the distribution
companies to BAT and BATA?

Also, how can he solve the inefficiency of state corporations, which have
been forced to form joint ventures with most of the Suharto-linked private
companies, and thereby lost their independence, their competitiveness, and
even control over their financial accounts? Just ask the people at the
state-owned electricity corporation (PLN), the state-owned
telecommunication company (PT Telkom), the state-owned road management
company (PT Jasa Marga), whether this is true or not, provided that their
freedom from prosecution is guaranteed.

In the meantime, without publicly declaring all his wealth and shares which
he and his family members may have in the Bakrie companies, in the
Indonesian subsidiary of British-American Tobacco, in the Indonesian
subsidiary of Bata, as well as in the Indonesian subsidiary of Heinneken
Beer (Bir Bintang), even relinquishing his positions as directors or
commissioners of those companies would not mean much in terms of minimizing
his conflicts of interests.

In this case we should learn from the examples of former Minister Siswono,
whose family companies' business connections even further flourished after
he was appointed as Suharto's Minister of Public Housing and then Minister
of Transmigration and Resettlement. Or the example of still Minister Abdul
Latief, whose Alatief Corporation succeeded to obtain its most lucrative
business connections with Freeport McMoRan, ITT Sheraton, and the
Australian shipping giant P & O, after he was appointed as Suharto's
Minister of Labour.

The least we can do, as in the case of the Alatas business connections is
to call for an international boycott of Bata shoes and Heinneken beer, and
all the cigarette brands mentioned above. Also, a more concerted campaign
against Freeport McMoRan, the mining moron of Louisiana.

Indonesian Capital Market Directory 1997. Jakarta: Institute for Economic
and Financial Research, pp. 4-5, 66-67, 88-89, 136-137, 470-471, 534-535.

Swasembada, May 1994: 42-44.

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