Jakarta, CNBC Indonesia \u2013 One of the world\u2019s largest sugar business\nempires once emerged from Semarang, Central Java.<\/p>\n
The company owned by businessman Oei Tiong Ham was able to dominate\nthe international sugar market and generate extraordinary wealth. But\nthe success built over decades eventually collapsed after the state\nseized all the company\u2019s assets in Indonesia.<\/p>\n
The story began with Oei Tiong Ham Concern (OTHC), a conglomerate\nthat was once a major force in the sugar trade during the Dutch East\nIndies era. It grew rapidly, eventually challenging Western companies\nthat had previously dominated the sugar industry.<\/p>\n
The business\u2019s success did not last. After its founder died, the\ncompany faced various legal problems and asset disputes. The culmination\ncame in 1961, when a court ruling in Semarang ended the Oei family\u2019s\ncontrol of its business assets in Indonesia.<\/p>\n
OTHC was founded in 1893 by Oei Tiong Ham, a Chinese businessman born\nin Semarang. It had four sugar-sector subsidiaries located in India,\nSingapore and London.<\/p>\n
According to Onghokham\u2019s Konglomerat Oei Tiong Ham<\/em> (1992),\nthe scale of the group\u2019s business enabled OTHC to export 200,000 tonnes\nof sugar, surpassing Western companies in 1911\u20131912. At the same time,\nOTHC successfully captured 60 per cent of the sugar market in the Dutch\nEast Indies.<\/p>\n Such a large business empire helped Oei Tiong Ham amass a fortune of\n200 million guilders. By way of comparison, one guilder in 1925 could\nbuy 20kg of rice. Using a rice price of Rp10,850 per kilogram, his\nwealth is estimated to have been equivalent to Rp43.4 trillion.<\/p>\n After Oei Tiong Ham\u2019s death, however, a series of problems beset the\ncompany, eventually leading to its collapse. The story began when OTHC\u2019s\nheirs filed a claim in a Dutch court against Bank Indonesia\u2019s Amsterdam\nbranch.<\/p>\n They sought the return of millions of guilders in deposits held at De\nJavasche Bank, the predecessor of Bank Indonesia, before the Second\nWorld War, in 1942.<\/p>\n The Indonesian Government wanted to use the money to build a sugar\nfactory. The heirs argued that the government had no right to use the\ncompany\u2019s inherited funds.<\/p>\n The heirs ultimately won their case. The Dutch court ordered the\ngovernment to return the deposits. The government complied, but the\nfamily considered this the beginning of the downfall of OTHC\u2019s business\nempire.<\/p>\n \u201cAccording to Oei Tjong Tay (Oei Tiong Ham\u2019s son), this repayment\nprompted the government to look for reasons to seize all of OTHC\u2019s\nassets in Indonesia,\u201d Benny G. Setiono wrote in Tionghoa dalam\nPusaran Politik<\/em> (2003).<\/p>\n Not long after the claim, in 1961, the Semarang court summoned the\nshareholders of Kian Gwan, the principal vehicle of the OTHC\nconglomerate. They were to face trial on economic charges over alleged\nviolations of foreign-exchange regulations.<\/p>\n Because all the heirs lived overseas and no defence was presented,\nthe Semarang court found OTHC guilty. On 10 July 1961, the evidence\nconnected with the case was confiscated and seized by the state.<\/p>\n The seizure, carried out in a single day, also encompassed Oei Tiong\nHam\u2019s inheritance. In other words, all the assets of OTHC and the Oei\nfamily were seized. The proceeds from the confiscation later became\ncapital for the establishment, in 1964, of the state-owned sugar company\nPT Rajawali Nusantara Indonesia (RNI).<\/p>\n Following the state takeover, the decades-long history of OTHC, a\nmajor conglomerate during the colonial era, faded away. The descendants\nof Oei Tiong Ham also disappeared from public view, leaving only a place\nin history.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/the-semarang-sugar-tycoon-whose-global-business-empire-collapsed-overnight-1791618637",
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"sponsor": "Okusi Associates",
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