suharto family empire in 35 yrs
The Suharto family empire
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- Subject: The Suharto family empire
- From: Robert Weissman <firstname.lastname@example.org>
- Date: Sat, 21 Mar 1998 13:47:14 -0500 (EST)
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. Sources: ----------- 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.