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[sangkancil] Aditjondro: Holland Randstad: Suharto's Lucretive Capital Market(fwd)
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Date: 26 Sep 2000 01:24:22
From: plovers@gn.apc.org
Reply-To: Conference act.indonesia <indonesia-act@igc.apc.org>
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Subject: Aditjondro: Holland Randstad: Suharto's Lucretive Capital Market
From: Tapol <plovers@gn.apc.org>
Subject: Aditjondro: Holland Randstad: Suharto's Lucretive Capital Market
Received from Joyo Indonesian News
Published in IMF (Indonesie, Meningen en Feiten),
Journal of Komite Indonesie, Amsterdam
September 2000
HOLLAND RANDSTAD: SUHARTO'S LUCRATIVE CAPITAL MARKET
By George J. Aditjondro
WHEN Suharto dissolved the Dutch-led Inter Governmental Group on
Indonesia (IGGI), eight years ago, he certainly did not terminate the
economic ties between the Netherlands and its former colony. On the
contrary, there has been a rapid increase of Indonesian companies opening
their offices in the Netherlands during that very same time frame. And
ironically, while opposing any cricism from then IGGI chairperson, Jan
Pieter Pronk on the violations of the East Timorese people's human rights
and the violation of Indonesian women's reproductive rights, Suharto
himself unshamefully used a Dutch subsidiary of the Indonesian central bank
to launder around one billion US dollars of his ill -gotten wealth, as has
been charged by the Indonesian Attorney General in the trial which the
former dictator is currently facing in Jakarta.
Since the early 1990s, an increasing number of well-connected
Indonesian companies have linked up with a handful of Dutch banks and other
financial institutions to tap into the lucrative European capital market.
In addition, an Amsterdam-based subsidiary of the Indonesian Central Bank
has even been alleged of laundering at least one billion US dollars for the
Suharto family and their cronies, which raises the questions: first, what
is so attractive, financially speaking, that so many of those
well-connected Indonesian business people have opened shop in the
Netherlands? Which raises the second question: what are the moral standards
guiding the Dutch financial community that all these Indonesian
conglomerates, which have caused so much economic, political, human and
ecological damage, are so warmly welcomed in this country?
Nearly all major Indonesian conglomerates which are either owned or
cooperate with members of Suharto's extended family have set up their
subsidiaries in 'Holland Randstad,' and mainly in Amsterdam and Rotterdam,
to be able to mobilise capital by issuing bonds in US dollars and Japanese
Yen. One example is the toll road company of Suharto's eldest daughter,
Siti Hardiyanti Rukmana, also known as Tutut, which has successfully
mobilised capital to finance her toll roads in Indonesia, the Philippines,
and Burma.
Other examples are the cement factory and steam power plants of
Hashim Djojohadikusumo, whose elder brother, ex-General Prabowo Subianto
married Tutut's younger sister, Siti Hediyati Haryadi, or Titiek, has
raised capital to finance the construction of his newest cement factories
in Indonesia and Burma. Cooperating with the military junta in Burma, is
not a big deal for Tutut and Titiek, who also delightfully grew up in their
Daddy's disguised military regime.
Two conglomerates which were directed by Mohammad "Bob" Hasan on
behalf of three charities headed by Suharto, namely the Astra and Nusamba
Groups, have also raised capital in the Netherlands for their paper and
pulp factories, timber estates and gold mines.
The well-connected Indonesian oil palm plantations, which have for
the last decade caused catastrophic forest fires in Sumatra and Kalimantan,
have been the most popular economic sector which have raised their capital
through their subsidiaries and their banker friends in the Netherlands. A
recent study by Eric Wakker, Jan Willem van Gelder and the Telapak Sawit
Research Team, which was commissioned by Greenpeace Netherlands has listed
all those top palm oil producers and their Dutch financial supporters.
The five largest financial underwriters
To complement Wakker, Willem and Telapak's study, a number of Dutch
journalists assisted me to surf on the Dutch Chamber of Commerce's website
to investigate whether other economic sectors have also been raising
capital in the Netherlands. This library research, which covered the
previously mentioned toll road and cement factories, as well as mining and
property companies. All these data basically show that only a handful of
banks in the BENELUX countries have offered their service to these
Indonesian companies.
One Dutch bank and one joint Dutch-Belgian bank stand out in
offering office space and financial management services to these companies,
namely ABN-AMRO Bank and MeesPierson Trust (see Tables I & II). The latter
currently belongs to the Fortis Group. Other Dutch banks, such as Rabobank
and ING Bank, have provided those Suharto-linked and other top Indonesian
companies with syndicated loans to finance their business expansion.
--------------------------------------
Table I: Top Indonesian companies whoseDutch financial subsidiaries are
managed by ABN-AMRO Trust (Nederland) BV
(1). PT Surya Damai Industri (joint venture between Martias, a top forestry
businessman and Yayasan Dharmais, a charity headed by Suharto)
(2). PT Trias Sentosa (partly owned by Sigit Harjojudanto, Suharto's eldest
son)
(3). PT Plaza Indonesia (partly owned by Bambang Trihatmodjo, Suharto's
second son)
(4). PT Asia Cellular Satellite (idem)
(5). PT Mandala Nusantara (partly owned by Tommy Suharto, Suharto's
youngest son)
(6). PT Semen Cibinong (partly owned by Titiek Prabowo, Suharto's second
daughter, and her brother-in-law, Hashim Djojohadikusumo)
(7). PT Pan London Sumatra (partly owned by Ibrahim Risyad, an Acehnese
crony of Suharto)
(8). PT Argo Pantes (partly owned by The Nien King, a Suharto crony)
(9). PT Alatief (partly owned by Abdul Latief, a former Minister and
Suharto crony)
(10). PT Mulia Industrindo (partly owned by Eka Tjandranegara, a crony of
Titiek Prabowo)
------------------------------------------
Table II: Top Indonesian companies whose Dutch financial subsidiaries are
managed by MeesPierson Trust BV
(1). PT Astra International (partly owned by three top Indonesian
businessmen: Bob Hasan, Liem Sioe Liong, Prajogo Pangestu
(2). PT Inti Indorayon Utama (partly owned by Sukanto Tanoto, a top
Indonesian businessman)
(3). PT Inti Indosawit (joint venture between Liem Sioe Liong, Suharto's
richest crony, and Sukanto Tanoto)
(4). PT Japfa Comfeed (joint venture between Bambang Trihatmodjo and one of
his cronies, Freddy Gozali)
(5). First Pacific Group (the Hong Kong-based conglomerate of Liem Sioe Liong)
(6). Albright & Wilson Limited (an Australian-based chemical factory partly
owned by Liem Sioe Liong from the Salim Group, Suharto's richest crony)
(7). PT Tri Polyta (partly owned by Bambang Trihatmodjo)
(8). PT Satelindo (joint venture between Bambang Trihatmodjo & Tomy Winata,
main financial backer of the Indonesian Army)
(9). PT Bakrie & Brothers (a Suharto family crony)
(10). PT Paiton Energy (partly owned by Titiek Prabowo & Hashim
Djojohadikusumo)
(11). Sinar Mas Group (owned by Eka Tjipta Widjaja, Suharto's second
richest crony)
(12). PT Pan London Sumatra (partly owned by Ibrahim Risyad)
(13). PT Mulialand (partly owned by Eka Tjandranegara)
(14). PT Lippo Land Development (owned by James Riady, Suharto's crony who
"donated" Bill Clinton's US presidential campaign)
A relatively newly established Dutch bank, Bank Insinger de
Beaufort BV, stands out as a unique bank which has been set up quite
recently, unlike ABN-AMRO Bank, Rabobank, and MeesPierson Bank. It was only
founded on October 25, 1973, and is the sole shareholder of Equity Trust
Co. (Etrusco) NV, located at De Boelelaan 7, Officia 1, 1083H Amsterdam.
Yet, this company has obtained enough clout to manage financial
subsidiaries of the following companies:
= Tutut's toll road company, PT Citra Marga Nusaphala Persada -- since 1995;
= Medco Group of Arifin Panigoro, a former crony of Tutut's husband, Indra
Rukmana -- since 1996;
= Camerlin investment syndicate of Liem Sioe Liong and other top
businesses in Singapore and Malaysia -- since 1997;
= Gotaas-Larsen, a Norwegian tanker company which was acquired in 1997 by
the Singapore-based Osprey Maritime Ltd. and is partly owned by Bambang
Trihatmodjo -- since 1997.
What has then attracted all these top Indonesian companies to raise
funds from global capital markets by linking with those Dutch banks? The
answer is twofold. First, the chosen Dutch banks already have a
well-established international link with money markets around the world.
Secondly, the Netherlands provide these Indonesian subsidiaries with a
taxing concession, which is very lucrative. Back-to-back loans, namely when
these subsidiaries borrow from the BENELUX capital markets and lend it on
to their holding companies in Indonesia or anywhere else on the same day,
will only have the balance between the borrowing rate and the lending rate
being taxed.
An example from Wakker, van Gelder and Telapak's study is a case
from Astra Overseas Finance BV. On August 1996, this financial company
issued US$ 200 million Guaranteed Bonds, due in 2003, listed on the
Luxemburg Stock Exhange. They carry an interest rate of 8.75% annually, and
are guaranteed by PT Astra International in Jakarta.
On the same day, Astra Overseas Finance BV used the proceeds of the
bonds to issue a US$ 200 million loan to PT Astra International, also due
in 2003. The loan carries an interest rate of 8.755% annually, plus a
spread of 0.25% till April 28, 1997, and 0.125% onwards. So, we see that
with only the balance of 0.005% of the loan being taxed, the Netherlands
nearly becomes a tax haven for all these Indonesian - and other -
companies. With the time difference of around eight hours between Amsterdam
and Jakarta, back-to-back arrangements
are not that difficult to arrange.
The main money laundering conduit?
Let us now move on to another more lucrative business, which
Suharto has been charged of, namely money laundering. The bank at issue
here is N.V. De Indonesische Overzeese Bank, or Indover Bank, which was set
up in Amsterdam by Bank Indonesia, the Indonesian Central Bank on July 1,
1965. According to the Indonesian Attorney General, Marzuki Darusman, two
Indonesian managers of this bank are suspected of assisting the former
dictator to siphon around US$ 1 billion from government coffers to seven
charities chaired by Suharto, through Indover Bank.
The two managers are suspected of having purchased medium-term
notes by Indover and used Bank Indonesia foreign-exchange reserves to
transfer Suharto's illgotten wealth to offshore tax shelters. They were
posted at Indover's headquarters in Amsterdam and its branch office in Hong
Kong, when the losses to the Indonesian government coffers were incurred
from 1993 to 1998. After the money had been transferred to offshore tax
havens, it was later reinvested in Indonesia by business partners of
Suharto's six children (Business Week, February 28 & August 31, 2000).
Indover Bank's role as one of the places where Suharto's illgotten
wealth has been deposited first came to the lime light in May last year,
when two of Suharto's cronies - Bob Hasan and Prajogo Pangestu - were
interrogated by the then Attorney General under the Habibie administration.
During the interrogation, Prajogo admitted that he had donated about US$
225 million to three of the Suharto-led foundations, namely Yayasan
(Foundation) Supersemar, Yayasan Dharmais, and Yayasan DAKAB. The donations
were transferred in 1990 by Prajogo from Citibank Singapore and the Jakarta
branches of two state banks, Bank Dagang Negara (BDN) and Bank Bumi Daya
(BBD), to the account of those three foundations at Indover Bank in
Amsterdam (Jakarta Post and Waspada , May 22, 1999, from the Indonesian
state news agency, Antara).
This indicate that Indover Bank may have been used as a conduit to
launder Suharto's illgotten wealth for a much longer time than what
Attorney General Marzuki Darusman has alleged.
What next?
After realising how the Dutch financial and legal systems have
enabled the former dictator and his relatives and friends to further spread
their ill -gotten wealth around the globe, as far away as possible from the
hands of the Indonesian people, how should the Dutch people respond?
Should the Dutch people simply continue to close their eyes and
lift their shoulders, since the origin of any wealth invested - or simply
'stopping over' -- in the Netherlands is not of their business?
Or should they also stop and reflect, whether they may also have
blood on their hands, by buying the bonds of companies, which have for more
than three decades pushed people of their land, burnt their forests,
polluted their water, soil, and air, and detained, tortured, and killed
whoever was blocking their ways to "progress" without impunity?
Or, should they refrain from buying those bonds, force the Dutch
government to prohibit these companies from using the lucrative taxing
facilities in this country, and persuade all Dutch banks to freeze the
accounts of the Suharto foundations and the companies which were wholly or
partially financed by those foundations?
Hopefully, unlike the Nazi gold which has taken half a century and
uncountable court cases before the Swiss banks agreed to compensate some of
the Holocaust survivors and relatives of the victims, the Dutch people will
take a more ethical stance in relation to the manipulation of their banking
system by these extremely greedy and ruthless relatives and friends of the
former dictator, Suharto.
Without this ethical stand, Holland Randstad will simply become
another tax haven to move away billions of dollars that should have been
used to compensate the survivors and relatives of the victims of the 1965
massacre and all successive massacres in Indonesia.
-End-
**************************************************
Paul Barber
TAPOL, the Indonesia Human Rights Campaign,
25 Plovers Way, Alton Hampshire GU34 2JJ
Tel/Fax: 01420 80153
Email: plovers@gn.apc.org
Internet: www.gn.apc.org/tapol
Defending victims of oppression in Indonesia and
East Timor, 1973-2000
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