No longer the richest: Aburizal

Adianto Parulian Simamora ,  The Jakarta Post ,  Jakarta   |  Fri, 12/12/2008 10:47 AM  |  Business

Having been center stage in a series of controversies, the head of the politically powerful Bakrie family, Coordinating Minister for People's Welfare Aburizal Bakrie, has finally spoken out about the family name no longer being included on the list of the nation's richest.

Known by many as a key financier of the ruling elite, including President Susilo Bambang Yudhoyono's 2004 election campaign, Aburizal claimed Thursday that the family business empire has drastically shrunk in value due to the U.S.-originated financial meltdown.

"I'm left now with an asset of less than 10 percent (of the previous value). Some 90 percent (has) gone as reflected in the share price (of PT Bumi Resources) that once reached Rp 8,500," said Aburizal.

The share price of coal producer Bumi, the Bakries most valuable company, ended up at Rp 1,000 on Thursday's trading.

"I'm no longer on the list (of the richest) due to the financial crisis in the United States," said Aburizal, referring to the Forbes Magazine's pointed focus on the country's richest man with a net worth of US$5.4 billion, as of 2007.

The Bakrie business empire, with investment holding PT Bakrie & Brothers as the flagship, has been on the verge of collapse after being bogged down with $1.2 billion of debt, collateralized by pledged shares, whilst the debt should have been settled immediately following the Oct. 6 stock market collapse.

Thanks in part to good business connections, Bakrie & Brothers have managed to slip out sideways from trouble by inking a deal with various "friendly" parties to help restructure their debts whilst sustaining relatively minor damage, although temporarily losing some stake in their major subsidiaries.

This settlement has been reached after allegedly leading to a row in the Cabinet, with "iron lady" Finance Minister Sri Mulyani Indrawati threatening to resign over a decision by Yudhoyono to provide special treatment to the Bakries.

This treatment included Yudhoyono's alleged intervention in the conduct of the country's stock market by annulling Mulyani's decision to lift the suspension in the trading of Bumi shares.

"I have no authority to intervene in the affair. I have never even talked about Bumi and Bakrie shares. But my relation with Mulyani is good."

"Maybe my family has requested some assistance similar to the case where (U.S.-based) General Motors has sought government support," said Aburizal, adding that there was no government facility given to the family when the debt problems were settled.

Aburizal is known as the country's iconic native tycoon, locally termed pengusaha pribumi, with his arch-rival businessman Arifin Panigoro of Medco Group trailing behind.

Aburizal also played a major role in putting some other pengusaha pribumi on the rise, including Vice President Jusuf Kalla, also chairman of the Golkar Party, who surfaced on the national radar back in the 1990s when he was a relatively unknown businessman from eastern Indonesia running the Hadji Kalla Group empire.

Meanwhile, Bakrie & Brothers abruptly postponed Thursday the seeking of shareholders approval for the company's stake sale in Bumi to several investors, despite earlier announcements that the agenda item was to be included in the shareholder meeting.

"We can't ask our shareholders to approve the joint venture agreement (of the Bumi stake sale scheme) as it's now still under advanced discussion," said Bakrie & Brothers spokesman Dileep Srivastava.

Dileep argued the agenda item would be not relevant for discussion at this stage because shareholders had yet to receive a complete explanation of the deal.

The postponed agenda, however, has raised questions among investors whose shares could be affected by the action.

"They didn't say much about the postponed agenda," said a shareholder who asked for anonymity.

Bakrie & Brothers have also postponed seeking approval for pledging the company's current and future assets in relation to its financing activities. (hwa)

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