You can contact the author (Teguh Hidayat) by email, teguh.idx@gmail.com. The author live in Jakarta, Indonesia.

See my pictures in Instagram, @teguhidx.

Forbes Not-so-Accurate List

If you were Aburizal ‘Ical’ Bakrie, what is your reaction when Forbes says if your wealth 'only' US$ 2.1 billion? If it was me, I would smile, are you kiddin’ me? Let see, when Bakrie & Brothers (BNBR) executing the right issue in 2008 alone, this parent company of the Bakrie Group obtained fresh fund of Rp40.1 trillion, or about US$ 4 billion. Not to mention the spate of rights issues, IPOs, from several other members of the Bakrie Seven Brothers, where the standby buyers are themselves. And outside of a few companies listed on the exchange, the Bakrie Group still has dozens of companies engaged in almost all business sectors.

Not only Ical (or precisely the Bakrie family, because in the Bakrie Group there are not only Ical, but also Nirwan, Indra, and Roosmania Bakrie), but the value of assets of other conglomerates may not be as 'small' as presented by Forbes. The figures presented by Forbes may seem very large (of course, who say that US$ 1 billion is a little money?), but in fact, it is possible that some of the entrepreneurs in the Forbes list have a much greater amount of wealth than mentioned.

For example, Forbes said that Budi and Michael Hartono, the owners of Bank BCA and Djarum Group, who were named as the richest men in Indonesia, has a total fortune of US$ 11 billion. Really? Let us count. The two brothers have recorded 47.2% stake in Bank BCA (BBCA). BBCA market value when this article was written is Rp160 trillion, or about US$ 14.4 billion. Thus, the wealth of the Hartono Brothers in BCA is approximately 47.2% x US$ 14.4 billion = US$ 6.8 billion. What about Djarum? The public does not know its exact value because the company is not listed on the Stock Exchange, but some say that the value is approximately equivalent to Gudang Garam (GGRM). What is the value GGRM? Rp88 trillion or US$ 7.9 billion. Assuming that Djarum value is equal to GGRM, then the total wealth of the Hartono Brothers was US$ 14.7 billion, derived from Djarum and Bank BCA only. And what about the Grand Indonesia Superblock? Hartono family also has businesses in property, agriculture, chemicals, wood and furniture, textiles, plastics, and electronic commerce (Polytron). How much the total value of everything? You may count by yourself.

Next, Mochtar Riady, founder and owner of the Lippo Group, which recorded fortune of US$ 730 million fortune. It is a joke or what? The value of Lippo Karawaci (LPKR) alone was US$ 1.5 billion. Okay, the Lippo Group has not hold 100% of LPKR share, but what about Matahari Putra Prima, First Media, Lippo Insurance, Lippo Securities, and others? Lippo Group also has several companies in Singapore and Hong Kong. When they sell Matahari Dept. Store, they obtained fresh funds of more than Rp5 trillion or about US$ 450 million.

Anthoni Salim is mentioned to have a fortune of US$ 3 billion. Well, if we take a look at Indofood where Salim Group holds 50.1% stake in it, then Mr. Anthoni’s wealth has reached US$ 2 billion. But Mr. Anthoni not only have Indofood. He also has Indomobil, Indosiar, Indomaret, Fast Food Indonesia, Multistrada, and of course a number of private companies. Salim Group also still has 13% stake in Indocement. And such other conglomerates, the Salim Group also has several overseas companies, most notably First Pacific Ltd, a Hong Kong based company that is the parent of all Salim Group companies across Asia, including Indofood.

And perhaps the most striking is Sukanto Tanoto. Forbes said that the wealth of the owner of Royal Golden Eagle (RGE) Group is US$ 1.4 billion. Okay, let's see. RGE has APRIL (Asia Pacific Resources International Ltd), one of the largest paper companies in the world. RGE is also the parent of Asian Agri, a giant oil palm plantation company with a size of roughly equivalent Astra Agro Lestari (AALI). There also Sateri, a wood and fiber company listed on the Hong Kong stock exchange. And lastly, Pacific Oil & Gas (PO&G), an oil and gas company. Overall, RGE had total assets of more than US$ 10 billion (that is before Sateri went public in Hong Kong). Say as majority owner, the ownership of Mr. Sukanto at RGE is half of the total assets, while the rest is owned by minority shareholders, or in form of debts. Then that means about US$ 5 billion, is not it?

In the current Forbes list, there are two new guys who had not previously entered the list (or they had, but not so visible), when these men are already rich from the first. They are Kiki Barki, who is noted to have a fortune of US$ 1.7 billion, and Trihatma Haliman, US$ 600 million. Kiki Barki list is on the list because of his stake in Harum Energy (HRUM), a coal company that is listed on the Stock Exchange just some months ago. While in fact, Mr. Barki still have three other coal companies outside HRUM. Mr. Haliman also makes the list because of his stake in Agung Podomoro Land (APLN), which is also went public just a moment yago. Though APLN is only a fraction of total assets held by the Agung Podomoro Group.

That's just a bit. What about the other people? Please check it by yourself.

In addition to not so accurate published the value of wealth, Forbes also 'forgot' to include some names who have no less fortune than the the members of ‘the 40 richest people in Indonesia’. For example Tomy Winata, the owner of Artha Graha Group, Agung Sedayu Group, a prestigious office complex Sudirman Center Business District, and many more. Or Tommy Suharto, one of the main heir to the Cendana family. And what about Ibrahim Risjad, who just obtained US$ 1.5 billion by selling Berau Coal to Recapital Group? And so on.

Forbes itself admitted that their list is incomplete, and the data is also not very accurate. According to Millie Stephanie, CEO of Forbes Indonesia, Forbes only calculates the wealth of the conglomerate based on their ownerships in the public company open that is listing on the stock exchange. They were not calculating the companies outside the stock exchange, because the data are hard to find. That's why Cendana family (family of the late president Suharto), for example, are not on the list because their companies are mostly private companies that are not listed on any stock exchange, so no one knows exactly how much of their wealth, except their own.

Well, the reasons are quite reasonable anyway, and it is also not that easy to estimate how much the number of wealth of a person or a family. But as a well known press company in the field of ‘rich list’, probably the best, I think Forbes should do better than that.

Unfortunately, Indonesia does not have a media company that is able to make a similar list, for comparison of course. It is funny that American Forbes know about the rich people in Indonesia, better than Indonesian press themselves. Bisnis Indonesia newspaper, or SWA magazine, what are you doing?

But perhaps, the rich are also happy to be mentioned ‘poor' by Forbes. Because it makes them easier to deal with taxes. As reported, soon after the list was published, the Directorate General of Taxation said that they will check the tax payments of the rich. Well, the taxes is always a problem of everyone, no matter where you live, is not it?

Original article was written at December 7, 2010

No comments: