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Assets of Suharto Inc run into the billions

Source
Reuters - September 17, 1998

Jakarta – Indonesia's former president Suharto, facing questioning this week by a government probe into his wealth, says he doesn't have "even one cent" stashed in foreign bank accounts.

His children lament that they have been battered by the country's savage economic downturn. Son Bambang Trihatmodjo says he can no longer be called a rich man, and youngest son Hutomo "Tommy" Mandala Putra has had to sell off his 60 percent stake in luxury Italian sportscar company Lamborghini.

But analysts say that despite Indonesia's economic crisis and a backlash against Suharto family companies in the wake of the former president's fall, the wealth of Suharto Inc runs into billions of dollars. Some estimates go as high as $40 billion – approaching the amount of money being pumped into the stricken country by international donors to keep the economy from collapse.

Most analysts say this figure is too high. But all agree the sprawling business empires linked to Suharto's relatives, along with more than 100 shadowy "charitable foundations" connected to the former president, are worth several billion dollars – without taking into account cash stashed overseas. "My suspicion is that $40 billion is an exaggeration. But that is not to say the Suharto family is not immensely wealthy," said Roderick Brazier, director of publications at the Castle Group. "I would guess it would be $8-10 billion."

The Castle Group is a Jakarta-based business consultancy that has published a study of the Suharto family's wealth and several studies of Indonesia's corporate landscape. Brazier said the personal wealth of Suharto's six children was likely to be $4-5 billion, with the charitable foundations adding another $2 billion. "On top of that, I would imagine the family has squirrelled away in the order of another couple of billion," he said.

Some observers believe Suharto may have much more than this hidden in overseas bank accounts. David Hale, chief economist of Switzerland's Zurich Insurance, told Barron's magazine he estimated Suharto had moved $8 billion from Indonesia to Austria in the months before his fall. According to Austria's Wirtschaftsblatt newspaper, the value of investments held by foreign depositors at Austrian banks rose 93 billion schillings ($7 billion) in the first quarter of 1998. The paper said much of the money was believed to be Suharto's.

US magazine Forbes put the clan's wealth at $16 billion last year, but this year cut the estimate to a more modest $4 billion. The Indonesian Business Data Centre (IBDC), an independent consultancy, says the family's assets are likely to be as high as 200 trillion rupiah ($18 billion). "We believe that is a reasonable estimate," IBDC executive Benny Sindunata said.

Suharto insisted in a rare television appearance this month that talk of his wealth was exaggerated. "The fact is I don't even have one cent of savings abroad, don't have accounts at foreign banks, don't have deposits abroad and don't even have any shares in foreign firms, much less hundreds of billions of dollars," he said on the private TPI television channel, part-owned by his eldest daughter.

His son Bambang told reporters this week he could no longer be considered rich. "I might have been a rich person. But not any more," Bambang said. "You must know that the value of my shares has dropped drastically. I also have liabilities that must be paid in dollars. So how can I be called a rich man now?"

Analysts agree the wealth of Suharto's six children has been hard hit by their father's resignation on May 21, which has left them facing a far chillier business environment. Numerous state firms have cancelled contracts with companies linked to the former first family. Eldest son Sigit Harjojudanto and Tommy have lost many of the deals their Humpuss conglomerate had struck with the Pertamina state oil firm. Many of Suharto's children have resigned from executive positions in a bid to adopt a lower profile, but retain large holdings in numerous firms. Bambang, regarded as the wealthiest, has stepped down as head of the Bimantara conglomerate, though he still holds a hefty stake in the company. "The situation is very fluid, and the family has certainly been hit," Brazier said. "But the assets of the children alone can still be measured in billions of dollars."

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