Monday, July 1, 2013

Window Dressing

It was the rags-to-riches story to beat all rags-to-riches stories. Indonesia’s richest man, Eka Tjipta Widjaja, the semi-retired patriarch of the Sinar Mas group, built a fortune amounting to US$12 billion over the past few years on the back of rising commodity prices.

At age 7 he landed at Ujung Padang, Sulawesi, after a long boat ride from China's Fujian province. By 15, he was running his own business, peddling biscuits and candy door-to-door. Soon it was coconut oil trading, but the Japanese's price controls during WWII put a damper to that. His fortunes revived with the patronage of Suharto, and the founding of Sinar Mas for palm-oil production. It was a strategic tie-up with Salim's Liem Sioe Liong, Suharto's closest business associate.

They even had a bank, Bank Internasional Indonesia (BII), which was relinquished during the Asia financial crisis. The crown jewel of the family business was Asia Pulp and Paper (APP) incorporated in Singapore in 1994. The listing in the New York Exchange and a HQ in Singapore helped offset the dodgy image of investing in emerging markets, and state controlled Indonesian forest concessions.

The family business' relentless expansion required nonstop fund raising, and a former Chase Manhattan banker was recruited to raise billions for the Widjajas. Also recruited, allegedly for cosmetic reasons to keep the image burnished was Koh Beng Seng and Elizabeth Sam, both former senior officials of the Monetary Authority of Singapore -- the country's central bank -- as "senior advisers." But it was rumoured both Koh and Ms Sam weren't given much responsibility at APP, the company's finances remained firmly under the control of Hendrik Tee, the genius from Chase. Both left within 15 months.

Some said their departure sent a signal to some Singaporean bankers that problems might be looming at the company. Window dressing can do only so much. The loss of BII had also deprived the Widjajas of a compliant in-house bank from which to borrow, and APP's short-term borrowing jumped from $561 million at the end of 1998 to $1.85 billion at the end of June 2000 . A flaky bond exchange offering spooked investors and the NYSE-listed stock price closed at 20 cents on a Friday in 2001, down from a 1995 IPO price of $11.50.

But commodity prices has put a smile on their faces again, never mind if the conglomerate’s various enterprises often raise the ire of environmental non-governmental organisations. Who cares if the NGOs  remain skeptical of the group’s public relations campaigns, money can always be counted on to put up willing faces.


  1. An article which said Singapore worker is not skillful enoughm, compare to Germany, Japan & Swiss,I tend to agreed.

    Not enough media encouragement of the skills? Singapore skills works had reached it height in the 80s and 90s later tapered off? The perception it is a dirty job? In highly developed country, their skilled workfore is not so pressure and do such quick turnaround like Singapore, which rely on less educated foreigners?

    Less children been born, skills job had an image problems, whereas in Germany, Switzerland and Japan it was highly respect and well paid, which many of these skills workers spearhead the innovations which drive the economy?

    Low pay and competitions from foreign workers, quite a few grow old became cleaners, which are the less educated skill worker?

    Since Singapore recognised it had a problem, massive incentive needed to develop the skills or trade workfore in term of incentives, training, education and innovations?

  2. Senior consultants and high ranking VIPs have bought properties overseas for their retirement. So are the rest who can afford to leave. PAP s know it. When the ship sinks, the captain and the officers will be the first to jump ship.

  3. Sold out for 30 pieces of silver