Harvey Nichols repositions targeted market

PT Mitra Adiperkasa (MAPI) Tbk denied our earlier report about closing down Harvey Nichols store in Jakarta. The company said it just relaunched and repositioning the targeted markets. MAPI also claimed the store's performance has been progressing well. 

"We just did a relaunch back in September as well as repositioning our targeted market. And as far as I have observed, things have been progressing well," Joseph Landri, investor relations of PT Mitra Adiperkasa (MAPI) Tbk said.

Rumors about closing down Harvey Nichols in Jakarta have been out there since December. Kontan newspaper quoted anonymous source early last month about the plan to close down the store, reportedly due to poor prospect. The newspaper even speculated on substantial layoff.

We got the same information last week, most likely because of the so-called "repositioning". But Landri said "this news (closing down Jakarta store) is completely false and deceitful."

Unfortunately Landri didn't provide details about the "repositioning". Let's see whether this "repositioning" will work. 

Late last year, the food market had been closed down. Others have speculated on the closing down of Harvey Nichols after Chloe boutique closed its doors, replaced by store for old stocks from Harvey last year.

PT Hamparan Nusantara, a subsidiary of MAPI, entered into an exclusive license agreement with Harvey Nichols in January 23, 2007 which grants the company the right to open and operate stores Harvey Nichols, guaranteed by the company. Under the agreement, Hamparan shall pay royalty and other fees based on certain percentage.

MAPI is listed on IDX with market capitalization of Rp1.09 trillion as of January 22, 2009. The company reported net sales of Rp4.04 trillion in nine months of 2009, increased 15.6% from the same period in 2008. Unfortunately, no details provided on individual stores. 

MAPI booked net profit of Rp166.3 billion in Jan-Sep 2009, doubled from Rp83 billion in the same period of 2008, but mainly due to non-cash gain in foreign exchange translation of Rp147 billion. The company's operating profit increased 14.5% in the period. MAPI is controlled by PT Satya Mulia Gema Gemilang (58%), Prudential Life Assuance (6.76%), and public (34.4%). 

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Harvey Nichols will close its Jakarta store

Expensive store Harvey Nichols will close down its store in Grand Indonesia shopping town, Jakarta, reportedly on poor performance. Opened in October 23rd, 2008, the store occupies 9500 square meter pole position at the East Mall of Grand Indonesia and managed by PT Mitra Adiperkasa (MAPI) Tbk, the leading lifestyle retailer in the country.

The food market has previously been closed down. But the Social House restaurant, bar, and wine shop owned by Ismaya Group will keep open its doors.

Harvey Nichols is an international luxury lifestyle store. Jakarta is the only city in South East Asia with Harvey Nichols store. It operates other stores in London, Hong Kong, Dubai, Istanbul, and Riyadh.

Well, the initial plan was to open Harrods in Grand Indonesia, developed by Djarum Group. But even in Singapore the store scored little success. The operator of luxury stores believe Indonesia has lot more affluent customers than Singapore. But looks like the affluent customers prefer to go overseas for shopping.

Mitra Adiperkasa also operates Debenhams and Sogo in Indonesia. The company moved Debenhams from Plaza Indonesia, Grand Indonesia's neighbor, in August 2008 to Karawaci Malla to prevent competition with Harvey Nichols.

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Artalyta removed to the real prison

Convicted businesswoman Artalyta Suryani has been removed from his "luxury cell" in Pondok Bambu prison in Jakarta to Tangerang Penitentiary tonight along with two other "star prisoners", Limarita and Darmawati Dareho, following public outrage on the finding from the Presidential judicial corruption task force's surprised inspection in a number of penitentiaries on Sunday.

There is no information available about the "quality" of the new cell for Artalyta, sentenced to five years jail in July 2008 for bribing prosecutor Urip Tri Gunawan US$660,000. Urip, who led an investigation into the alleged embezzlement of Bank Indonesia liquidity support funds (BLBI) involving tycoons Sjamsul Nursalim and Anthony Salim, has also been sentenced in the case.

Artalyta, according to the judges, asked Urip to give the summons letter for Sjamsul to her, so that Sjamsul would avoid questioning at the Attorney General's Office (AGO). Sjamsul reportedly lives in Singapore or Shanghai, China. His family controls PT Gajah Tunggal (GJTL) Tbk and Giti Tire (China).

Will Artalyta try to get another special privilege in Tangerang?

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Nursalim's apartment auction

I read Sunday paper with an ad from Tuan Sing, Singapore-listed company controlled by Sjamsul Nursalim family, inviting Indonesian buyers to an auction of Botanika, a 34-unit boutique apartment next to Singapore's Botanic Gardens. According to the ad, only 12 units left to be auctioned off. TODAY reported last week that the other 22 units have already been sold at a private preview consisting of the developer's friends and business associates (Wanna know the buyers?). A transaction last month saw a unit fetching close to S$2,000/square feet. Wow! With floors range from 1,500 - 3,300 sq feet, the auction could take the price to the sky!

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Sinivasan captured in India?

Marimutu Sinivasan, one of the largest debtor with around Rp27 trillion unpaid loans to the state, has reportedly been captured in India and now on his way home.

Sinivasan fled the country in March 15 last year, two days before Police asked immigration office to impose overseas travel ban on him. That time, his lawyer claimed Sinivasan fled the country for medical treatment. Police put Sinivasan in the wanted list to stand trial in a banking loan scam. In June, police claimed a cooperation with Interpol and Indian police to hunt down Sinivasan.
Prosecutors then promised to proceed the in absentia trial but no information since then.
(I remember back in Dec 2001 when AGO issued red notice to 184 countries and asked Interpol to have tycoon Sjamsul Nursalim stand trial back home. He fled the country, reportedly for medical treatment. Some reports said Nursalim, the owner of Gajah Tunggal group & Giti Tire (the largest tire manufacturer in China), lives in Singapore.)
In July, Rakyat Merdeka reported Sinivasan gave the power of attorney to lawyer Hery Suryadi to settle the debts, again no follow ups.
VP Jusuf Kalla was in India last week and met some businessmen, but no reports if he ever met Sinivasan there. Sinivasan's late brother Marimutu Manimaren was Golkar Party's treasurer.
I just can't imagine how difficult for the police to catch someone hiding in India. Is is possible that Sinivasan met the Vice President in private but failed to convince Mr Kalla to pay the debts as promised and then asked the police to lock the businessman in?
In the last two days, media run the conflicting statements from government officers regarding Sinivasan's Texmaco Group. While Secretary to the Minister of SOEs Said Didu said that government would takeover the company and make it a new SOE, Minister of Industry Fahmi Idris strongly rejected the idea arguing 'that's not in line with government's overall privatization strategy."

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Nursalim raises GHG bid to A$350 million

Sjamsul Nursalim's Tuan Sing Holdings has raised its offer to acquire Grand Hotel Group (GHG) to Aus$350 million. Meanwhile Sidney Morning Herald reported Morgan Stanley's property arm has joined forces with Tuan Sing in the offer.

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The Richest Indonesians & The Ironies

What a coincidence! Out there, Dow Jones quoted Forbes Asia's rich list, naming Sukanto Tanoto (owner of Raja Garuda Mas/RGM) as its Indonesia richest. At home, newspapers quoted SOE Minister Sugiharto pledge his support for state bank PT Bank Mandiri Tbk to take legal action toward recalcitrant debtors. Mandiri had named RGM as one of the debtors with no good faith.

While it's difficult to verify the exact figures, Sukanto's wealth according to Forbes reached US$2.8 billion, well above Putera Sampoerna (2.1), Eka Tjipta Widjaja (2), Rahman Halim (1.8) or R. Budi Hartono (1.4) and Aburizal Bakrie (1.2). In the previous list, Forbes named Halim as Indonesia's wealthiest while Sukanto was not even in the top five list. Wondering how the Forbes list has changed so significantly in the last few months.
Detik.com reported Sukanto is still in the police's fugitive list. But I'm not sure whether he is listed there still.
It's true that Sukanto once named a fugitive. His name also linked closely with Unibank which was closed down in 2001 but none held responsible for third party liabilities in the bank. The case isn't closed yet.
Sukanto's wealth mainly derived from palm oil business. He has pulp & paper empire, and recently oil and gas as well.
Surprisingly, no Sjamsul Nursalim in the top 10 list. Riady family, Tommy Winata, and Mum'in Ali Gunawan are out of top 10 as well. Riady family is partnering with Forbes for Indonesian edition, scheduled early next year.
Like it or not, agree or disagree, Forbes list could help Indonesia's tax officers chasing their tax payments or Bank Mandiri's bargaining position on bad loans. The list also useful for politicians, regent, governor candidates, or hopeful president candidates.
If you follow years of Forbes’ rich list, there is no significant change on the names of Indonesian richest. The difference is only on the amount of wealth & the rankings. The wealthy Indonesians could be categorized in several groups based on how they got their fortunes.
First, cigarette groups. We have Sampoerna family (even though they sold out the cigarette business to Phillip Morris), Wonowijoyo (Gudang Garam), Hartono (Djarum), and Peter Sondakh (Bentoel).
Second, forestry & plantation groups. We have Eka Tjipta Wijaya family (Sinar Mas Group), Sukanto Tanoto (Raja Garuda Mas), & Prajogo Pangestu (Barito).
Third, consumer goods. We have Salim and Wings Group.
Fourth, energy & engineering groups. We have Bakrie family, Panigoro (Medco), Kris Wiluan (Citra).
Fifth, property group. In this group we have Tan Kian (Dua Mutiara), Haliman Trihatma (Podomoro), Tommy Winata-Sugianto Kusuma (Artha Graha), Riady Family (Lippo).
Sixth, manufacturing. In this group we have Nursalim (Gajah Tunggal) for example.
So, mainly they got the fortunes from Indonesia’s rich & cheap resources (natural & human).
While most of these groups have expanded overseas (mainly China, India, or Brazil), Indonesian operations are still their main source of wealth. Most of these conglomerates were hurt by financial crisis, with the exception of cigarette groups.
But they have recovered in the last few years, thanks to the generosity of Indonesian people, the taxpayers. The state bailed out their bad debts. Some surrendered assets, but others managed to escape the financial responsibility easily.
Salim Group, for example, surrendered assets in 107 companies to pay around Rp56 trillion (US$6 billion) debt following the turmoil at Bank Central Asia (BCA). Government sold almost all the pledged assets with recovery rate of around 35%. Nursalim also did the same to pay his Rp28 trillion (US$3 billion) debt, with lower recovery rate.
Government also spent almost US$2 billion to bail out Bank International Indonesia (previously owned by Eka Tjipta’s Sinar Mas, currently controlled by Temasek).
That’s why there is almost no significant change in names listed in Forbes, the latest edition and in 1990s. The fact that Sukanto & Eka Tjipta are listed as number one and third in the ranking sparked criticism about how they created the wealth.
Both Sukanto & Eka Tjipta have strong pulp/paper & plantation (mainly crude palm oil) businesses through APRIL (RGM) Holdings & Asia Pulp & Paper (APP) respectively. Both groups have been the subject of continues allegation of environmental groups over massive deforestation in Sumatra Island.
WWF report few months ago said that APRIL and Asia Pulp & Paper (APP), the Indonesian paper producers, are accelerating the deforestation of Sumatra's jungles in spite of a bid to portray themselves as green.
According to the report, APP has been responsible for about 80,000 hectares of natural forest loss every year, equivalent to roughly one-half of the Indonesia province of Riau's annual forest loss since 2002. As of 2005, the company controlled nearly one-fifth, or 520,000 hectares, of the natural forests left on Riau's mainland. All these forests are under threat, as are any additional forests that APP acquires in its quest to fill its wood supply gap and expand pulp production.
WWF didn't publish the same press release on APRIL. But WWF Monitoring Brief June 2006 elaborated the organization's analysis on APRIL's activities.
Jikalahari (Riau NGO alliance) investigators have found evidence that APRIL's mills accepted wood from legally questionable third party source as late as May 2006. WWF admitted in the report that it calls APRIL to stop sourcing timber from this area until completion of the government legal verification process.
One NGO leader wrote cynically in Indonesian media recently that if you want to be rich, do the forestry business in Indonesia like Sukanto & Eka Tjipta. Other names listed in the Forbes report also have been regularly accused of various illegal practices such as fraud on reforestation funds or involvement in drugs & narcotics trading, gambling operation, or fishy deals with government and the military. But none of them convicted or worse various interest groups make huge chunk of money from the allegations on these richest men.

/Named a Suspect/
Apart of environmental concerns, the Forbes report has also been responded by Indonesia’s largest lender (by asset), Bank Mandiri, which happens to be the largest lender to Sukanto’s RGM. The bank has, several times, classified RGM as the debtor without good faith in settlement of almost US$500 million debts. Mandiri demands an increase in debt installment following the huge jump in pulp prices worldwide.
The day Forbes announced the rich-list, Indonesian minister for state-owned enterprises (Mandiri’s shareholder) pledged his support for Mandiri’s plan to take legal action against recalcitrant debtors, especially RGM. RGM denied all the charges arguing it follows the debt restructuring agreed upon few years ago.
A director at Mandiri was quoted by Indonesian newspapers saying, “You may rich, but pay your debts,” responding the list.
But it’s the police who surprised many when it announced the plan to reopen the investigation on Sukanto, not for the alleged environmental crime or his debts at Mandiri, but on a suspected banking crime that almost untouched in five years.
Just days after Forbes published the list, Indonesian police announced that it has resumed the investigation on Sukanto, named a suspect in a banking crime few years ago. Police declared that the case, involving Unibank---a bank initially owned/controlled by Sukanto and his wife Tinah Bingei, has been reopened after five years of almost no significant progress in investigation despite the fact that Sukanto had been named a suspect.
Unibank was closed down in 2001 leaving the state paying all third party liabilities (Rp3.9 trillion, almost US$400 million) with no shareholders held responsible. Sukanto was named a suspect on irregularities of export L/C worth US$230 million.
"Based on a meeting between Police Chief and Attorney General in August 2006, Sukanto's case has to be reopened and his status is still as suspect. The case is being handled by police team for corruption crime (Tipikor)," Paulus Purwoko, chief of public relations division at National Police Headquarter as reported by Indonesian media.
The sudden announcement failed to surprise the media at the time of eroding trust on the country’s campaign to fight corruption. Many raised the question, would the police be serious this time? Why the police reopen the case after so long? Could this be just part of ‘political’ game?
"Whatever the results might be, the reopening of the case has made Sukanto, well-known for his generosity overseas, shivering," a journalist from respected magazine commented the move. So far, police has not confirmed yet on when they would summon Sukanto for investigation.
The fellow journalist mentioned about Singapore-INSEAD's Tanoto Library or Carnegie Mellon's Tanoto Professorship. The owner of Raja Garuda Mas (RGM) also established Tanoto Foundation, which provide scholarships.
It’s not about his donations that make people doubt the investigation, but mainly the power politics in the country’s corrupt-legal system. Police might finalize the investigation, but state prosecutors may drop the case like what’s happened with the recent corruption allegation on Eddie Widiono (state-owned electricity company PLN).
Other intriguing issue is the unavailability of legal cooperation between Indonesia and Singapore. While Sukanto normally come to Indonesia, he stays in Singapore. “The problem, we have no bilateral agreement on this,” sighed the deputy attorney general Basrief Arief, who is also the Chief of Corruptors Hunting Team.
Besides, the five-year time lag since the Unibank’s closure in October 2001 is critical especially when it comes to witnesses. That’s why Attorney General’s Office said they would start the investigation all over again. This is clearly a big test for the country’s tattered image on corruption eradication campaign. Without serious efforts to end bad governance in Indonesian business, we can’t expect a cleaner sheet in the future rich lists.

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Mulpha to acquire Nursalim's Grand Hotel

Mulpha (SPV 1) Limited, a wholly owned subsidiary of Mulpha Australia Ltd has made an off-market cash offer to acquire all the securities on issue of Grand Hotel Group, a subsidiary of Singapore-listed Tuan Sing Holdings controlled by Sjamsul Nursalim family.

GHG Chairman William J. Conn told Australia Stock Exchange (ASX) on Friday that GHG had appointed Merrill Lynch and Freehills as its advisors for the transaction. No details available on the value of Mulpha's offer.
Grand Hotel Group (GHG) is the leading owner of 5-star hotel properties and is the second largest accomodation owner in Australia. Mulpha is controlled by Lee Ming Tee and his son Lee Seng Huang.
Tuan Sing's primary business activities are property, industrial services, retail and technology. The Group has over 80 subsidiaries and associates, with a workforce of more than 3,400 employees operating in various countries in the Asia Pacific region.
Tuan Sing reported total revenue of S$194 million in the first half 2006, increased 47% from the same period last year.

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Just outsmart Berkeley Mafia!

A group of economists appeared in a seminar titled 40 Years of Mafia Berkeley vs Alternative Ideas of Indonesia's economic development, yesterday. They're former chief economic minister Rizal Ramli (under Abdurrahman Wahid administration), Kwik Kian Gie (former chief economic minister under Wahid, replaced by Ramli), Ichsanuddin Noorsy, Revrisond Baswir, and Sri Edi Swasono (son-in-law of first Vice President Mohammad Hatta). Guest speaker was Jeffrey Winters (Northwestern University).

It was an unbalanced seminar as none of what they called Mafia Berkeley delivered arguments, no exchange of arguments actually, it's a kind of monologue of ideas, it's like bad idea vs good idea. That was not an academic exercise of thoughts. The speakers believe the alternative ideas they delivered are the only public goods. So that's a seminar with so many personal issues at stakes.
The speakers even failed to explain or acknowledged what they did and didn't while they have power in their hands to drive the economic policies into what they believe the right way and change the course of the nation.
Nor did they explain what's wrong or right during BJ Habibie's strong influence in the economy of the early 1990s. So don't expect them explaining what's right and wrong during the early years of Berkeley Mafia.
How we explain the massive debt settlement of 1998-2001 during which the government's domestic debt jumped to Rp700 trillion (US$80 billion) to bailout corporate debts of the like Texmaco Group's Rp30 trillion, Salim's Rp60 trillion, Sjamsul Nursalim's Rp28 trillion, or Sinar Mas's Rp14 trillion?
It were Soeharto's last year, Habibie, Wahid and Megawati administration's economic team who endorsed the debt settlement through agreements like the Master of Settlement and Acquisition Agreement (MSAA), MRNIA, or Debt Acknowledgement Acts (APU). How we explain the problems at state-owned enterprises like Habibie's aircraft company PT IPTN (now Dirgantara Indonesia), Garuda Indonesia, PLN, Pertamina and so forth?
I believe the Mafia Berkeley had committed some wrongdoings, just like the other mafias of Habibie's, Ginandjar's, Rizal Ramli's or Kwik Kian Gie's.
Look at this. Rizal Ramli and Kwik Kian Gie as the coordinating minister for the economy during Wahid administration had the chance to fix the lousy debt settlements with Salim, Nursalim, or even Sinivasan's Texmaco. But they were hopeless, not because of the Berkeley Mafia, but simply because of the complicated and fluid political situation aftermath of the 1998 reform.
I believe in one thing...when it comes to liberalization, globalization, privatization...they're all political decisions, not just economic models. There are a lot of aspects of the society at play. Simply blaming the mafi is just like you had a headache in the morning and keep blaming the traffic jam on your way to office for your bad day.
What's amazing is the acknowledgement of this alternative group of how powerful the Berkeley Mafia so it could survive almost 40 years and still in the driving seat of the economy even though none of them hold official position in the cabinet. I must say this Mafia Berkeley is so smart to control this big country four decades so far and may be more.
Other mafia groups might have to learn of how Mafia Berkeley keep its power. An old advise, if you really want to beat the members of this mafia, outsmart them all! All you have to do is to convince all the stakeholders of this nation to get their full attention on your alternative ideas. People are smart enough to make decision, they could analyze what's wrong and right with Berkeley Mafia and what's wrong or right with your ideas! Don't get mad, get even!

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The trials we missed, The winners takes all

It's just inches away for former president Soeharto to be a free man. The cabinet has prepared the presidential decree for a full rehabilitation for him and the first president Soekarno as the sweetener. In fact, as reported by Tempointeraktif.com, Attorney General's Office had lifted the overseas travel ban on Soeharto. So, he could get first-class medical treatment overseas very soon. I do agree with Koran Tempo's editorial today that insists a trial for Soeharto and after that the president may issue an abolition or amnesty.
But I do realize that's a daylight dreaming especially with the current political structure, a result of Soeharto's clever moves. Most people still in the believe that Soeharto always pretend to be a sick person whenever prosecutors try to have him stands trial. But even if he's mentally healthy, as I believe that's the case, the power structure has been weak enough to make it happen. And this also applies to those banking criminals. Why?
Soeharto's aides were so clever to endorse the political liberalization aftermath the boss downfall. The reformists blindly campaigned for a full liberalization without ever calculating the impacts on their movements, especially on Soeharto and his cronies. Without limitation on number of political parties entitled to contest the 1999 election, the nation was stunned with almost 45 political parties registered to contest.
The New Order regime smartly invested in establishing political parties, not to resume the power, but mainly to prevent one single party win the election with clear majority votes. The strategy worked pretty well. PDI-P came out as the winner but only with 33% seats in the parliament. Golkar was the second with 20%-something, while others well below 20%. That was the first victory for Soeharto followed by the second when Megawati lost the presidential election to Abdurrahman Wahid. Golkar clearly was behind Wahid's win. Wahid appointed Marzuki Darusman, a Golkar executive, as the Attorney General. The then Golkar chairman Akbar Tanjung won the election of the House Speaker.
On the surface, the new administration led by Wahid and Megawati was seen as a strong coalition of nationalists. Wahid did start the prosecution on Soeharto and named him a suspect with corruption charges. Soeharto didn't show up in the first hearing in August 3, 2000 and missed two consecutive hearings in August 31 and September 14, 2000. Two weeks later, judges rejected the trial and released Soeharto from city arrest status.
Wahid once sent Susilo Bambang Yudhoyono (that time as mining and energy minister) to negotiate the return of Soeharto family's wealth (Time magazine once reported the amount) to the state. Soeharto's oldest daughter Siti Hardijanti Rukmana (Mbak Tutut) admitted the meeting with Yudhoyono that time.
But then the coalition broke up with shameful impeachment of Wahid supported immensely by Golkar, PPP, other parties, and most importantly the silent support from Indonesian military.
Megawati replaced Wahid and Hamzah Haz (former minister under BJ Habibie administration, then chairman of PPP) was the elected VP. We had new coalition of PDI-P, Golkar and PPP; plus the military. In such a coalition, Megawati administration was hopeless when it comes to Soeharto's trial. Megawati found a new friend, Akbar Tanjung and his Golkar Party without which she wouldn't survive till the 2004 election. Her administration revived the investigation in June 2002, but Soeharto's medical team managed to stop the trial when they announced Soeharto's permanent brain disorder.
In the 2004 election runoff, politicians 'managed' to impose stricter requirements for political parties which entitled to contest. Megawati lost the election despite formal support from Golkar which came out as the winner of legislative election. Military, despite its out-of-politic claim, was in fact behind Megawati's main contender, Susilo Bambang Yudhoyono, a retired army general. Megawati tried to boost her popularity with a promise to bring Soeharto to court, but people just didn't buy. Critics on Yudhoyono's partner, Jusuf Kalla (key Golkar figure and businessman), were also ignored. SBY-JK won anonimously the election. Few months in office, Yudhoyono explicitly told public that he would prefer to forget the past and move on with the new chapter. And last year he paid a visit to Soeharto when the former boss was rushed to a hospital. VP Jusuf Kalla and other political figures did the same. They echoed the call to put an end to Soeharto's trial. This week, almost all of the national leaderships join the chorus and this time Soeharto would likely score the biggest victory. Freedom! Rehabilitation! Abolition! Whatever.
Soeharto's crony capitalists have scored their own victories at the time of reform euphoria in the 1998-1999 period. This is the period when Soeharto's loving 'pupil' BJ Habibie lead the transition administration. Habibie's administration signed the famous Master of Settlement and Acquisition Agreement (MSAA) with bank owners who committed banking crimes i.e. the violation of legal lending limit (LLL).
Under the MSAA, Habibie's administration agreed not to bring the bankers to court for their respective crimes as long as they payback the amount of bailout loans. These bankers agreed with condition that they don't have to pay in cash. Government said OK, cash and nearcash or other assets that could be sold.
Salim, the owner of Bank Central Asia (BCA), then paid few trillions of rupiah in cash and shares in 107 companies to pay around 60 trillion debts. Sjamsul Nursalim (Gajah Tunggal) agreed to pay one trillion rupiah in cash and Rp27 trillion in assets. Soeharto's golf buddy Mohammad 'Bob' Hasan and Soeharto's cousin Sudwikatmono also signed the similar MSAAs. Government have sold out almost all of these pledged assets at heavy discounts, some bought by the debtors themselves through special purpose vehicle companies established overseas.
Other bank owners signed different forms of MSAA such as MRNIA or APU, which were basically the same i.e. exchange the freedom with payments of debts. Some says these crony capitalists invested a lot in some political parties to get these agreements, something extremely difficult to proof. And these agreements were the saviour for the banking criminals, bullets proof!
These are the trials that we missed so much. And these supposedly crime suspects are the winners that takes all, including our dream for justice. The least Yudhoyono could do, may be, is telling public his negotiations with Soeharto family during Wahid's administration to return the wealths to the state.
PS: A banker from Switzerland sent greetings to Soeharto. He asked me whether it's true that Soeharto is free to go overseas. Unfortunately he didn't tell me why he raised that particular issue!

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Reinventing Crony Capitalism, A Research

If you have any interest in Indonesian tycoons, the rise, fall, rise again and maybe fall again...and how politics at play...Reinventing Crony Capitalism might be a good start...

About the business conglomerates in the past, present, and future...Salim Group, Nursalim-Gozali, Eka Tjipta, Sukanto, Prayogo, Riady family, Wings Group, Djarum, Gudang Garam, Sampoerna family, Martua Sitorus-Wilmar Group, Cendana family business (Humpuss, Citra Lamtorogung), Soerdjaja family, Bakrie Family, Bukaka, Bosowa, Mahaka, Medco, Artha Graha, and others...send inquiries to my email at yosardi@hotmail.com.

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Lippo Karawaci acquired S$329 million Singapore property

The largest property company listed at Jakarta Stock Exchange PT Lippo Karawaci Tbk acquired a 159,075 ft site in Kim Seng Road, Singapore, at S$329 million, far above its book value at S$59 million.

According to Straits Times (April 11), Lippo bought the site from OCBC Bank. Lippo is also a hot favourite to buy OCBC's shares in retailer Robinson. Lippo Karawaci's market cap by the end of 2005 was US$540 million.

Lippo's competitor in the Robinson deal is PT Mitra Adi Perkasa (MAPI) Tbk, a listed retailer owned by Boyke Gozali and Sjamsul Nursalim.

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Richest Indonesians, My List

Below is my list of the richest Indonesian, based on their net worth in Indonesia and other countries:

1) Eka Tjipta Widjaya (major source of wealth: APP, Asia Food & Property, and finance)
2) Rahman Halim (Gudang Garam)
3) R. Budi Hartono (Djarum Group, properties, and 10% shares in BCA---the largest private-owned bank in Indonesia, Bank Hagakita, and Bank Haga)
4) Sukanto Tanoto (RGM International, APRIL)
5) Lim Sioe Liong (First Pacific, Indofood, Bogasari, Unggul Indah Cahaya, properties etc)
6) Sjamsul Nursalim (Gajah Tunggal tire, GT Petrochem, Singapore assets, Jakarta properties)
7) Soeharto & Family (Humpuss, Citra Group, Hanurata etc)
8) Putera Sampoerna
9) Mochtar Riyadi (Lippo properties)
10) Peter Sondakh (cash in hands, Bentoel)
11) Hashim Djoyohadikoesoemo (Khazakhstan and Azerbaijan oil and gas operations)
12) Aburizal Bakrie (Bakrie & Brothers, Bumi Resources, Energi Mega Persada, etc)
13) Paulus Tumewu (Ramayana)
14) Edwin Soeryadjaja (Adaro, MGTI, etc)
15) Sudwikatmono (Indika Group)

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What's weird with Forbes' Indonesia rich list?

We knew from the Forbes that Rahman Halim and family (Gudang Garam) is the richest in Indonesia followed by R Budi Hartono (owner of Djarum Group), Putera Sampoerna, Aburizal Bakrie, Lim Sioe Liong (Salim Group), Eka Tjipta Widjaja (Sinar Mas), and Paulus Tumewu (Ramayana Group).
1) Rahman Halim = US$2.3 billion
2) Budi Hartono = US$2.2 billion
3) Sampoerna = US$1 billion
4) Aburizal Bakrie = US$735 million
5) Lim Sioe Liong = US$655 million
6) Eka Tjipta Widjaja = US$515 million
7) Paulus Tumewu = US$500 million

Is it true that Bakrie is wealthier than Lim or Eka? Eka's net worth in 1999 Forbes list was at US$2.5 billion. It's true that the company struggled with the crisis at Bank International Indonesia (BII) in 2001 and the huge bonds at Asia Pulp & Paper. But the company survived and aggresively expand its business in the last four years.
Could it be possible that Tumewu or Bakrie are richer than Sukanto Tanoto who has US$7 billion investment in Brazil and China?
"No way that Bakrie could match Sukanto. I would say Eka Tjipta is the richest for Indonesia," said one investment banker in Singapore.
Where is Hashim Djoyohadikoesoemo with his US$2.5 billion worth of oil and gas assets in Khazakhstan & Azerbaijan?
How about Mochtar Riyadi family with their Lippo Group? How about Peter Sondakh who got US$800 million in cash from the divestment of Excelcomindo to Telekom Malaysia?
How about Soeharto? Where is Soeharto family's money which Time magazine estimated at US$15 billion eight years ago? The Soehartos' net worth was put by Forbes at $1.7 billion in 1999 and $4 billion in 1998. I just can't believe the family's wealth had dropped to below US$500 million.
What about Sjamsul Nursalim?
While he once had US$3 billion debts to government and pledged some key assets like Gajah Tunggal (the largest tire manufacturer), GT Petrochem (petrochemical company), and Dipasena (the largest shrimp farm in Asia), I believe that Sjamsul regained control over two of these companies, not to mention other assets in Indonesia and Singapore.
So many questions I can't answer myself. But I tend to believe that the Forbes list could help some of Indonesian richests who still owe the state or those who bought back their pledged assets to keep away from tax officers or those who want to squeeze their money for various reasons.
Last year tax officers questioned Paulus Tumewu over his personal income tax. Tax officers claimed Tumewu had cost the state losses of Rp355 billion (US$40 million). But no further investigation since September 2005 as Tumewu left the country to Singapore for 'medical treatment'.

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Press Day: Who'll pay decent journalism?

I believe press celebrities and media barons are listening President Susilo Bambang Yudhoyono's speech in Bandung, West Java while I'm writing this piece of 'speech'. I have nothing to congratulate except a question: Who'll pay decent journalism in Indonesia?
Let me take this Press Day opportunity to share little bit of my experience working for Indonesian media.
Well, I survived different press regimes in my only 14 years carreer in journalism. Under Soeharto, I got several legal notices from crony capitalists. "If you play hard, we could be harder. Be nice," one of those cronies once threatened.
I got no such notices during Abdurrahman Wahid. In 2002, I got one legal notice from a respected lawyer of one of the biggest debtors of Indonesia Bank Restructuring Agency (IBRA). The next year, I also got one legal notice from a tycoon who has a lot of investment in China and one of biggest debtors at IBRA as well.
My one-year sabatical leave in UC Berkeley was peaceful, no such notices. But few months ago, one of readers of this humble blog sent a complaint letter to my company (which is nothing to do with this blog) and the Press Council. So far, none of those legal notices ended up in court, surprisingly, even though most of them threatened to do so.
Still, I'm not sure of whether I had done something good for the readers or not. I believe, however, press freedom has given Indonesian journalists the chance to deliver good journalism. Competition is stiff and it is good. Indonesian journalism, as elsewhere, has to deal with reality, both as a business and an essential element in the democratic mozaic.
The much-ballyhooed citizens' or community journalism movement also flourished in Indonesia despite its limited potential in delivering good and serious journalism. From my experience, serious journalism such as investigative reporting is labor-intensive and time-consuming and therefore requires large amounts of money and health benefits and pensions.
With 180 newspapers published (jumped from 80 during Soeharto years) with hundreds of thousands copies the most, 60% of them even less than 10 thousands copies with well below average salary (mostly less than US$200 per month, still above the average per capita income though), only few are really economically viable. Even big names such as Tempo, Republika, or Jawa Pos are struggling financially.
Look at the contents. Almost 80% of their contents are all the same stories based on press releases, press statements, sports result, public hearings, court hearings, verdicts, etc. Why they publish different newspapers if the stories are all the same? If money is the problem for good journalism, why don't they merge?
Some publishers are die-hard to defend their ownerships even though they can't pay journalists well or silently approved the stories-for-money practices or simply use their media network for political or business deals.

Counter-Paid-Opinion

In recent months, more and more government institutions, including state-owned enterprises which deployed third party to counter public criticism through their paid-up articles under the title of advertorial (guess an abbreviation of advertising and editorial).
State-owned enterprises minister applied that for criticism on poor efficiency of SOEs, PLN on mark-up of power plant projects, and education minister of tuition subsidy. More and more ministers also published ads on their performances as well.
Sometimes, even in the respected publication such as Tempo, we could find a report from journalists (investigative ones) published side-by-side with such advetorials (off course in contrast to the journalist report) on the same issue. So be aware of the reminders at the end of such articles to differentiate which one is a journalism product.
Op-eds have become a huge business involving deals between analysts, experts or observers with businessmen, lawyers, or politicians or government officers in collaboration with media barons or editors. That's why we have to be careful in reading statements appeared in the media.

Tycoons into media
So far, like in other countries, media industry in Indonesia is owned by different types of investors. Kompas daily, for example, is controlled by Jakob Oetama, a highly respected journalist, through Kompas Gramedia Group. Tempo, listed at Jakarta Stock Exchange, is controlled by respected journalists like Goenawan Mohammad, Fikri Jufri, and Bambang Harymurti.
Jawa Pos Network is controlled by Dahlan Iskan, a former Tempo journalist. Media Group (Media Indonesia and MetroTV, among others) is owned by Surya Paloh, the chairman of patron board of Golkar Party. Golkar also owns Suara Karya. Former assembly speaker and minister during Soeharto years, Harmoko, controls Pos Kota Group.
Alwi Hamu, VP Jusuf Kalla's special staff, co-owns Fajar Media Group, the largest media network in eastern part of Indonesia, with Jawa Pos and Kalla family as partners.
My newspaper, Bisnis Indonesia, is owned by several businessmen (Sukamdani Sahid who owns Sahid Hotel chain, Ciputra the property tycoon, the late Eric Samola who also co-found Jawa Pos Group and Tempo, Subronto Laras who is executive at car manufacturer Suzuki, and the staffs who holds the majority shares).
Bakrie Family once owned some newspapers but have been closed down. The family, meanwhile, still controls ANTV. In the last few years, Sjamsul Nursalim acquired several newspapers including Sinar Harapan & Indonesia Shang Bao, while Lippo Group acquired Investor Indonesia (Daily and Magazine) and Suara Pembaruan.
Bimantara under Harry Tanoesoedibjo (an investment banker) also publish Seputar Indonesia and acquired Trust magazine on top of three TV stations (RCTI, TPI, and Global TV). Mahaka Group controls Republika.
We have also retail tycoon Abdul Latief with LaTV and Para Group (property and banking business) at TransTV.

Internationalization
We knew already that Mr Rupert Murdoch acquired 20% shares of ANTV, a network owned by Bakrie Family. Murdoch might also acquire 20% shares in TV7, a network owned by Kompas Gramedia Group. Malaysia's TV3 might soon become the new owner of the ailing LaTV.
We heard also the possible cooperation between Kompas and Murdoch in transforming economic tabloid Kontan into an economic daily that hit the newsstands next month. Lippo Group is reportedly had invited South China Morning Post as partner in Investor Daily and Suara Pembaruan. Mahaka Group, the majority owner of Republika, had also signed alliances with The New York Times and The Strait Times (Singapore).
Beyond The Media
Other critical issue is the influx of media barons into non-media business and use their media network to maneuver. Surya Paloh, the owner of Media Group (Media Indonesia and MetroTV), for example, is venturing in Cepu oil business with Bojonegoro Admnistration. Dahlan Iskan from Jawa Pos Group is also involved in Cepu dispute with his venture with East Java Administration.
Kompas Gramedia Group has been invited by Jakarta Governor to invest in toll road projects.

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