Salam Permias,
BRIDWAN:
>Bagaimana caranya saya bisa 'mengintip' informasi diatas ini ?
>Mohon bantuan dari Rekan yang kebetulan punya file nya.
>Thanks sebelumnya.
wsj.com bisa diintip 'sampai' artikel lengkapnya (bukan hanya ringkasan)
kalau berlangganan. Kebetulan saya berlangganan. Artikel dibawah cukup rame.
Silhkan dihapus jika terasa terlalu panjang.
Jabat erat,
Ahmad Syamil
Toledo, OH
****************************************************************************
December 30, 1998
The Suharto Regime Bungled
Many Chances to Amass Wealth
By RICHARD BORSUK
Staff Reporter of THE WALL STREET JOURNAL
JAKARTA, Indonesia -- For 32 years, the family of
President Suharto took a bite of countless businesses
here, from billboards to Boeings. It should have made
for one of the world's colossal fortunes.
But a great revelation of the tumultuous collapse of the
Suharto regime this year isn't that it enriched itself
beyond imagination at the expense of Indonesia's 200
million people. It's that it didn't.
The Suhartos are surely rich. But interviews and
documents gathered on four continents turn up a cold
irony: Given -- and having taken -- many opportunities to
profit from a nation steeped in treasure from forests to
oil to gold, the Suhartos blew a remarkable number of
the corporate schemes they touched. Far from having a
fortune that some political rivals have estimated at $40
billion or more, the Suhartos appear to have at most
one-tenth that.
That's enough to keep generations
of Suhartos wealthy, and a grand
sum indeed set against the
deepening poverty of ordinary
Indonesians. Still, the Suhartos'
efforts to parlay their influence into
productive corporate assets -- the
stuff huge and lasting fortunes are
made of -- often failed
spectacularly. So sure of
themselves were they right up to
the regime's bitter end, and so
averse to investing their own
money, that the Suhartos often
ended up amassing more debt than
assets. Many of their known
holdings have negative net worth today.
"Whatever they wanted, they got," says George Benson, a
former U.S. military attache in Jakarta who went on to
work for the Suharto regime for 25 years, mostly as a
Washington lobbyist. Building value, he says, was
neither a family priority nor talent. "They'd get 10% of
some project without putting up any money, then sit back
and collect the dividends."
Mr. Suharto and family members declined to respond to
numerous interview requests and faxed questions for this
article. Since leaving office in May, the former president
has offered to cooperate fully with investigators looking
into possible corruption in his administration, and has
been questioned twice by Indonesia's attorney general's
office. He has denied doing anything improper and says
he didn't stash money away illicitly. Indonesian
authorities have found roughly $3 million in his name in
domestic bank accounts, which Mr. Suharto says were
his life's savings as a public servant. Other family
members have said they violated no laws in their
business dealings and only pursued the best interests of
the country and fellow shareholders in their companies.
Yet it's clear now, many experts say, that the scale of
first-family avarice, graft and business blundering was a
key reason so many international investors fled Indonesia
last year, aggravating the economic collapse that brought
down the Suharto regime. Consider the fate of just some
of the state contracts, licenses and loans channeled to
Suharto children, detailed by company records and
executives involved:
Billions of dollars worth of telecommunications,
satellite and shipping assets -- all vital in an
archipelago nation of more than 13,000 islands --
were mortgaged by a Suharto son for quick cash.
Many of the loans are no longer being paid; one of
the lenders, also controlled by Suharto-linked
interests, is in bankruptcy. It's likely, executives
involved say, the family will lose most or all of
their stakes in many of those assets.
Indonesia's first privately owned jet airline, once
valued at more than $500 million, was devoured
from within by some of its own managers and
owners -- led by President Suharto's youngest son.
It's now bankrupt and grounded. The same Suharto
son priced the state-owned airline's charter flights
to Mecca, Saudi Arabia, so high that many people
in this, the world's largest Muslim population,
found it cheaper to make pilgrimages to the holy
city from nearby Singapore or Malaysia.
Indonesia's main auto maker, controlled by one
Suharto group, was pushed toward bankruptcy by
the "national car" program of another. Both
companies are effectively broke now, and the
government is demanding $400 million in back
taxes from one Suharto son involved. Other
megaprojects from pipelines to petrochemical
plants, executives say, were so badly planned, then
plundered, that what should have been easy profits
became towering debts.
The Suhartos still sit astride many valuable businesses.
Some of the holdings now underwater may rebound if the
Indonesian economy does. Among the remaining plums is
the country's most popular television station, controlled
by one son. A daughter dominates toll roads in Jakarta.
The family owns huge tracts of timber and shares in
sumptuous hotels. Overseas, a cousin owns a chunk of a
Hong Kong group that recently bought the Philippines'
main phone company. Hundreds of millions in cash is
squirreled away in offshore trusts, bankers say. The
family still has interests in the once-huge empire of
Indonesian tycoon Liem Sioe Liong.
Though eroded, "the pyramid is basically still in place,"
says a senior foreign banker here. However, he and
others say, it's now clear that the family's holdings were
worth less than $10 billion before the economic
collapse, and may be worth as little as $2 billion now.
Many Indonesians now demand, sometimes in bloody
street protests, that the government go after those assets.
But Mr. Suharto's successor, B.J. Habibie, was Mr.
Suharto's vice president and a Suharto business partner,
and military leaders loyal to the Suhartos remain in
power. Laws and presidential decrees promulgated by
the Suharto regime itself may make seizing the family's
assets illegal, some legal experts say. Tuesday, a
government commission investigating corruption said it
had found hundreds of millions of dollars of allegedly
tainted deals, most linked to the Suhartos.
The Suhartos, meanwhile, are replacing family names
on shareholder lists and boards of directors with
nominees. The goal is to end the companies' open ties to
the Suhartos, while preserving the family's wealth by
avoiding liquidations at today's distressed prices,
Suharto friends say.
How the Suhartos amassed -- and squandered -- so
much money traces back to Mr. Suharto's fusion of
modern capitalism and Javanese traditions of noblesse
oblige. The "crony capitalism" it produced helped him
rule one of the world's biggest and most divisive
populations by ensuring that the right people had ample
opportunities to make money. Even some of Mr.
Suharto's critics believe that for him, if not for some of
his relatives, the system was more about building
political power than wealth. Mr. Suharto himself
generally eschews the trappings of big money.
Mr. Suharto's financial master stroke
was his yayasans -- presidential
foundations funded by "voluntary"
contributions for "charity." Actually,
the contributions often were collected
through levies on everything from
utility bills to movie tickets. The
foundations funded many good works,
like schools. But they also bought
votes for Mr. Suharto's political group,
Suharto associates say. And, bankers
say, the foundations served as his personal merchant
banks, lending to and investing in favored projects, such
as his daughter's toll-road company.
One former chief executive of a yayasan-owned bank
recalls how Suharto family members dipped into
foundation accounts for free capital. First, family cronies
would coax bank managers into lending them yayasan
deposits, collateralized by Suharto-linked deposits at the
same bank. The yayasan funds would never get repaid,
this banker says, yet nobody would dare seize the
Suharto money.
Facing public wrath, Mr. Suharto recently ceded control
of seven yayasans, valued at roughly $530 million, to the
government. The Suhartos and friends still control
dozens more.
Mr. Suharto's late wife, Tien Suharto, was instrumental
in building the fortune -- and in launching the Suharto
children into business. Known as "Madame Tien
Percent" for her own alleged role in crony capitalism,
she hailed from Javanese aristocracy and raised their six
children with a keen sense of pedigree and entitlement,
Suharto associates say. Unlike the children of many
wealthy Asians, most Suharto kids never earned
university degrees. The Suharto name itself was "summa
cum laude," recalls a family confidant.
Suharto associates say Mrs. Tien, who died in 1996,
had her own relatives and friends installed in key
positions at institutions like Pertamina, the state-owned
oil company. Most Indonesian crude is exported by the
big Western oil companies who drill it; proceeds are
shared with Pertamina. But a small proportion is pumped
by Pertamina itself. Until the contracts were canceled
this summer, much of that oil was consigned for sale to
several Hong Kong and Singapore trading companies
controlled by Suharto children, according to Pertamina
officials and other executives. They say that family
companies also handled all of Indonesia's oil-product
imports.
In total, industry executives estimate, the companies
traded $500 million or more of oil products annually.
Pertamina officials say that since the Suharto-linked
contracts were canceled, the company has saved itself
roughly $30 million by selling the products itself.
When they tried going beyond simply taking a cut,
however, the Suhartos often stumbled. In 1992, Mr.
Suharto's second son, Bambang Trihatmodjo,
consolidated many of his oil-related shipping assets in a
Singapore company called Osprey Maritime Ltd. The
move allowed Osprey to tap Singapore's capital markets
with a $104 million initial public offering. Mr. Bambang
stayed out of management; Osprey was well run. It grew,
thanks to petroleum transport contracts landed through
Mr. Bambang's links with Pertamina.
But Mr. Bambang and his cronies wanted more, say
people who worked with them. When Osprey issued
more stock in 1997 to buy another shipping company,
Mr. Bambang and his partners borrowed money so they
could buy new shares and avoid dilution. The loan was
secured by their Osprey stock, Mr. Bambang's associates
say. Now those holdings are in jeopardy because
Osprey's share price, dependent on the Bambang links
with Pertamina, has plunged. Mr. Bambang's associates
say he isn't paying on the loan. The lender, a Jakarta
company connected to Mr. Bambang, is in bankruptcy
proceedings itself. It hasn't foreclosed on the Osprey
shares, Bambang associates say.
"The Suhartos fell from greed and overconfidence,"
says a close Bambang associate. Mr. Bambang didn't
respond to requests for comment for this article.
Mr. Bambang fared little better with another freebie, a
10% stake in Atlantic Richfield Co.'s Kangean gas field,
north of Bali. In 1989, Mr. Bambang's Bimantara Group
received the stake essentially for free after the
government ordered Arco to take on Bimantara as its
local partner, according to Arco and other executives
involved. But rather than simply lapping up profits from
Arco's guaranteed gas-sales agreement with Indonesia's
electric utility, Bimantara insisted on developing the
project's underwater pipeline itself, Pertamina and Arco
executives say.
But instead of a $250 million pipeline
through shallow waters and open
countryside, as Arco had planned,
Bimantara built a $400 million
pipeline through deep waters and
dense settlements. Bimantara cited
commercial reasons for the route, but
executives involved in the project say
Bimantara's economic assumptions
were dubious, at best.
The project was a year and a half late in coming on line
and cost Arco, Bimantara and Pertamina a total of
hundreds of millions of dollars of lost revenue, the
companies say. Now, because Bimantara and Pertamina
never formalized land procurement along the pipeline,
managers are having trouble keeping settlers away from
the area, a serious problem, they say, for maintenance
and safety.
Recently, Bimantara relinquished its 10% stake in the
gas field to Arco. Joseph Dharmabrata, director of
Bimantara's pipeline affiliate, confirms that the company
will likely default on the project's loans soon. He blames
the economic collapse, not any Bimantara mistakes.
Prospects for the project, he says, "are quite gloomy."
Mr. Bambang also stumbled in telecommunications. In
1993, a company he controlled, known as Satelindo, was
granted three coveted telecom licenses without any
competitive bidding, Satelindo executives acknowledge.
The licenses covered rights to sell long-distance and
mobile-phone services, plus exclusive control over a
new series of communications satellites. Satelindo,
started with just $50 million of equity capital -- actually
provided by military-controlled investment companies,
Satelindo executives say -- sold a 25% stake to Deutsche
Telekom AG of Germany for $586 million.
But in 1996, for Deutsche Telekom's own initial public
offering, the company disclosed it paid $676 million for
its Satelindo stake, or 15% more than Satelindo reported
receiving. The $90 million gap "was clearly a
facilitation" fee, says a U.S. investment banker who
worked on the deal. "I know what the numbers were, and
this was completely on the side."
Under German law at the time, such "facilitation fees"
were generally legal. In Frankfurt, a Deutsche Telekom
spokesman denies the company paid off anyone to get the
stake. He says the final purchase price mushroomed
because of brokerage and consulting costs and various
"transaction fees." Financial advisers involved in the
deal say legitimate fees couldn't have totaled even $20
million, much less $90 million.
Iwa Sewaka, who was president of Satelindo at the time,
and A. Kadir Assegaf, a top official of Bimantara, say
they have no knowledge of the $90 million in fees.
Allegations of rake-offs also arose in Satelindo's
purchase of roughly $800 million in cellular-phone
equipment, mostly from French manufacturer Alcatel SA,
say executives and bankers familiar with the deals. On
average, they say, the equipment was sold, through
associates of Mr. Bambang, at prices marked up by 25%
to 30%. Executives close to the deals say the inflated
prices were another form of "facilitation fee" for Mr.
Bambang and his cronies.
An Alcatel spokesman declines to
comment on Satelindo sales.
The bloated costs from such deals
pushed Satelindo's foreign debt to over
$500 million. Now Satelindo is being
restructured; Mr. Bambang, say
bankers involved, is likely to emerge
with no Satelindo equity. That is, if he
even still controls Satelindo shares.
Corporate documents show that Mr.
Bambang's stake, owned through one of his companies,
was pledged in 1997 as collateral for a $125 million
loan from Deutsche Bank AG, though officials close to
Deutsche Bank say the deal never materialized.
After Mr. Bambang, the most active Suharto child in
business was youngest son Hutomo Mandala Putra, better
known as Tommy. His top executives tended to be avid
race-car drivers like himself. In 1989, Mr. Tommy's
Humpuss Group won the right to establish Indonesia's
first private airline with jet aircraft.
Sempati Airlines was an instant success in this nation of
far-flung islands. Its new jets and snappy service won
business passengers from stodgy flag-carrier Garuda.
Sales peaked at about $700 million in 1996. Investment
bankers valued the company at $400 million to $500
million for a possible IPO.
But the low-margin, high-capital-cost airline business
didn't generate the kind of cash for Mr. Tommy that he
wanted, say executives who ran Sempati. So his cronies
created a separate company to broker Sempati's aircraft
leases, resulting in jacked-up rates, these executives say.
Later, they say, Mr. Tommy forced Sempati to buy the
planes at wildly inflated prices. Then, the executives
say, Mr. Tommy assigned Sempati's maintenance
operations to another Humpuss unit that more than
doubled the airline's maintenance bill.
Sempati, wallowing in debt, has been grounded since
earlier this year.
A former top Sempati manager says Mr. Tommy had no
clue what building corporate value meant. "He got cash
from other businesses counting sheep," he says. Mr.
Tommy didn't respond to requests for comment.
Actually, sheep haven't worked out, either. In the early
1990s, as their businesses multiplied, the Suharto kids
diversified their holdings overseas. One early foreign
foray was Mr. Tommy's sheep ranch in the snowy
mountains of New Zealand's Southern Alps.
Gerard Olde-Olthof, a former professional hunter, says
he persuaded Mr. Tommy to invest in the hunter's dream
of converting the Lilybank ranch from a sheep operation
into an exclusive hunting lodge when the two men met at
the Monaco Grand Prix auto race in 1989. With
Singapore insurance broker Alan Poh Lye Yee, they
poured $2.5 million into building a rustic,
stone-and-timber inn with eight plush guest suites,
majestic views and a trophy room bristling with antlers.
(Mr. Tommy's prize-winner, a giant wapiti elk, presides
in the corner.) It opened in 1995, but even at $580 a night
per suite, Lilybank never came close to breaking even,
Mr. Olde-Olthof says. It's up for sale.
Mr. Tommy also tried to buy New York's Plaza Hotel,
says Doug Hercher, the Jones Lang Wootton agent who
brokered the sale of the Manhattan landmark and who
worked with Mr. Tommy on other failed real-estate bids.
Mr. Hercher says Mr. Tommy's Plaza offer was never
taken seriously because he insisted on highly
concessionary terms from the bank group coordinating
the sale and wasn't willing to plunk down his own cash.
"It wasn't like the Sultan of Brunei, who comes in with a
suitcase full of cash and says, 'I'll take this and this,"'
Mr.
Hercher says. "Tommy was just a rich kid with 14
bodyguards and seven black cars in tow."
Mr. Tommy's acquisition of Italian sports-car maker
Lamborghini SpA in 1993 was another flight of folly,
says Setiawan Djody, Mr. Tommy's Indonesian partner
in the venture. Though Mr. Tommy sold Lamborghini for
a profit this year, the company never came close to
fulfilling Mr. Tommy's purpose in buying it: to put
Indonesia and Asia on the map in big-time auto racing.
According to Mr. Djody, a partner in several
Suharto-family businesses, Mr. Tommy's meddling drove
several key Lamborghini executives to quit, leaving it
rudderless. "Tommy never listened to anybody," the
Indonesian says.
Several Suharto siblings sought haven in Singapore, but
floundered there as well. In the mid-1990s, in what was
hailed as the "coming of age" of Indonesian companies,
brothers Bambang and Sigit and their cronies targeted
more than a dozen publicly traded Singapore companies
for possible acquisition. Their aim, say Singapore-based
investment bankers who advised them, was to tap
Singapore's sophisticated capital markets, to legitimize
connection-dependent businesses at home and to build a
beachhead for regional expansion.
But the family's loose business style didn't play well in
Singapore, advisers on the deals say. Take Van der
Horst Ltd., a sleepy Singapore marine-engineering
company until Bambang-associate Johannes Kotjo
acquired control of it in 1993. Soon, the company won a
series of big Indonesian contracts, and its shares soared
450%. In 1995, Mr. Bambang himself bought a 10%
stake in the company.
Cronyism quickly took its toll, however. Some of Van
der Horst's most lucrative projects on paper turned out to
be subcontracting jobs for Mr. Bambang's older brother,
Mr. Sigit, that stuck Van der Horst with big potential
liabilities, says Chia Yew Boon, former research
director in Singapore of defunct Peregrine Securities,
which handled a $100 million bond offer for Van der
Horst. In addition, when Mr. Kotjo was punished for
stock manipulation by Singapore authorities in
connection to a different investment with Mr. Bambang,
Van der Horst's image suffered by association.
Mr. Kotjo didn't respond to requests for comment. Last
year, with Van der Horst's shares trading at less than
one-third of their peak price, banks liquidated much of
Mr. Bambang's Van der Horst holdings, which he had
pledged as collateral for more loans.
Today, in Jakarta, Mr. Suharto still glows over his
children's achievements, say friends. Sometimes, Mr.
Bambang picks up Mr. Suharto and his closest friends in
a Jeep Cherokee and drives them to the elegant mosque
at Bimantara's skyscraper headquarters to pray. No one
mentions that the second son's business group -- once the
towering symbol of Suharto Inc. -- is today but a house
of sand. Mr. Suharto's friends aren't sure he even knows.
"We never talk about those painful things," says Bustanil
Arifin, a retired general and close Suharto confidant.
"He is so proud of those kids."
-- Darren McDermott and S. Karene Witcher
contributed to this article
