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Bargain sales hide trail of lost millions

Source
New Zealand Herald - May 13, 2000

Mathew Dearnaley – Indonesia's corruption inquiry into the vast wealth amassed during the Suharto clan's long stranglehold on power reaches deep into New Zealand's heartland.

New Zealand, the United States and Switzerland have been asked to help recover billions of dollars that Indonesia's new Government suspects are salted away around the world.

But Weekend Herald efforts to discover what the family of deposed President Suharto still owns in New Zealand have been stymied by ownership changes in which assets have been sold for token amounts. Suspicions that the assets have simply been "parked" have prompted calls for a more thorough investigation than the Government is now making.

Suharto – dubbed the "smiling general" – was toppled by civil unrest in 1998.

Despite the inroads of Indonesia's currency collapse, a Time magazine investigation concluded last year that the former first family retained holdings of $US15 billion. It said much of that fortune had disappeared overseas.

During 32 years at the top, Suharto fingers were in everything from airlines, oil and gas exports, television stations and toll roads to chopsticks, condoms and mineral water. The family's more than 4 million hectares of land holdings included nearly 40 per cent of East Timor.

The pace was set in the 1970s by Suharto's wife, the late Madame Tien – dubbed "Mrs Tien Per Cent" for her questionable business deals – but the couple's six pampered children pushed the limits of public tolerance by soaking up lucrative Government concessions once they came of age.

Suharto, now aged 78, protests that he has not taken a cent overseas and is suing Time, for three times the magazine's estimate of his family's fortune. He has been ordered to remain in Jakarta until doctors deem him well enough to cooperate with the corruption inquiry.

Foreign Minister Phil Goff, who promised to help Indonesia during a visit there last month, has already sent a dossier about South Island resort assets linked to two of Suharto's children.

Campaigners say the probe must go deeper if the full picture of their ownership here is to be uncovered. Mr Goff, who acknowledges that property has changed hands "in somewhat suspicious circumstances," says the Government will consider further investigation if Indonesia asks for it.

But his Associate Foreign Minister, Matt Robson, says the inquiry should be widened to "give consideration to corporate links between Suharto and New Zealand-based companies who may have got themselves unwittingly involved."

Suharto's youngest son, 37-year-old Hutomo (Tommy) Mandala Putra, and second daughter Siti Hediyati (Titiek) Prabowo have ostensibly severed their holiday-home links with this country.

But the Campaign Against Foreign Control in Aotearoa believes Tommy has simply "parked his holding." Last year, he sold a luxury hunting lodge built for more than $6 million at Lilybank Station high in the Mackenzie Country to a Singaporean associate, Alan Poh, for $1.

Mr Poh has turned the loss-making lodge, which once charged more than $700 a night for a room, into a "homestay" with a more modest $250 tariff while he concentrates on developing a deer farm. A spokesman for Mr Poh said the sale was genuine and took account of big liabilities on Lilybank.

Titiek – whose husband, Prabowo Subianto, headed the Kopassus special military forces accused of atrocities in East Timor, Irian Jaya and Aceh – sold two Queenstown chalets for $498,000 to an Indonesian company she is believed to control.

Campaign spokesman Murray Horton says New Zealand's peacekeeping role in East Timor makes it imperative to find out if any "blood money" remains in Queenstown.

He and the Auckland-based Indonesia Human Rights Committee want the inquiry extended to properties held by "cronies" of the Suharto family, and to corporate links between them and New Zealand.

Weekend Herald inquiries confirm that the son of long-serving Suharto cabinet minister Radius Prawiro has four chalets in the same Queenstown subdivision as the Prabowo property, and visits often with a retinue of children and servants. The Prawiros are believed to control at least 81 Indonesian companies, including joint ventures with Suharto concerns.

Australian-based Indonesian corruption researcher Dr George Aditjondro wants the Government to also investigate the man who introduced the Prabowos and Prawiros to Queenstown, businessman Firdaus Siddik.

Mr Siddik is in Indonesia and could not be reached for comment on a claim by Dr Aditjondro, a defence witness for Time, that he had Suharto links through a Dutch bank. But Queenstown property agent Mae Young described Mr Siddik as a generous man who had done a lot for the town, including building a community ice- skating rink.

Another Queenstown property source said he had heard that Mr Siddik, who chairs the New Zealand-Indonesia Business Council, had been offered a powerful regulatory position in the new Indonesian Government.

The campaigners claim that some corporate links with the Suharto regime reach further than just into resort playgrounds. Foremost in their sights is Brierley Investments Ltd, which owns 30 per cent of Air New Zealand and a big chunk of New Zealand's fishery through its half share in Sealord.

Brierley is effectively controlled through a 24.4 per cent stake by the Malaysian-based Camerlin consortium of Chinese investors, which includes the Salim Group of Suharto's main financial backer, Liem Sioe Liong.

Mr Liem, who supplied stores to Suharto's military unit in the 1940s anti-Dutch independence struggle, exploited monopoly concessions dispensed in return for his financial services to become Indonesia's richest man.

Brierley had an even more direct link with the Suharto regime by having to take Tommy Suharto as a minority shareholder in its troubled $1 billion Wayang Windu geothermal power project near Bandung in Java.

The Suharto son bowed out of the project after his father was toppled from power, but Brierley has yet to be paid for a 15 per cent "carried interest" held by Indonesian shareholders. Brierley, with a 75 per cent share, has written off its $420 million investment in the project.

And New Zealand state-owned electricity generator Mighty River Power does not expect to see much return from its 10 per cent of the project, inherited from the Government's carve-up of ECNZ.

Brierley chairman Sir Selwyn Cushing admitted the geothermal venture had been "a terrible experience," but referred all questions to chief executive Greg Terry, whom the Weekend Herald could not reach in London.

Murray Horton's group also criticises the involvement in Indonesia of Edison Mission Energy, which bought 40 per cent of electricity generator and retailer Contact Energy from the New Zealand Government last year.

The Wall Street Journal said Edison and General Electric gave Titiek Prabowo and other Suharto associates slices of an overpriced 1230MW coal-fired power station now caught in the same bind as the Brierley project.

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