Jakarta, CNBC Indonesia - Sudono Salim, also known as Liem Sioe\nLiong, is recognised as one of Indonesia\u2019s major conglomerates with a\nlong track record in business. He also had a close relationship with\nSuharto since the time the president held the rank of colonel.<\/p>\n
In the early period of Indonesia\u2019s founding, Sudono Salim was known\nas an entrepreneur operating in the import of cloves and providing\nlogistics for military needs. His extensive business network attracted\nthe attention of Colonel Suharto to establish cooperation.<\/p>\n
Their relationship was forged through Suharto\u2019s cousin, Sulardi. From\nthen on, Salim served as a logistics supplier for Colonel Suharto\u2019s\ntroops during Indonesia\u2019s War of Independence.<\/p>\n
\u201cAfter Suharto seized power in Indonesia in the mid-1960s and became\npresident, he was supported by a group of crony businessmen, the largest\nand strongest of which was Liem Sioe Liong,\u201d wrote Richard Borsuk and\nNancy Chng in Liem Sioe Liong and the Salim Group (2016), quoted on\nSunday (3\/12\/2023).<\/p>\n
The two were involved in a mutually beneficial relationship for three\ndecades. Suharto protected Liem and ensured his businesses ran smoothly.\nLiem, through the Salim Group business empire, channelled funds to\nSuharto, his family, and other cronies.<\/p>\n
As a result, both parties prospered in their respective paths. Salim\nsucceeded in being listed as Indonesia\u2019s richest person. Meanwhile,\nSuharto also succeeded in holding power in the country. However, their\nprosperity suddenly collapsed in just a few days in May 1998.<\/p>\n
Salim successfully built three business empires in three sectors,\nnamely banking (Bank Central Asia, BCA), construction (Indocement), and\nfood (Bogasari and Indofood). However, all of that slowly deteriorated\nas it entered the 1998 crisis. BCA was the worst affected.<\/p>\n
Historian M.C. Ricklefs in A History of Modern Indonesia (2009)\nstates that during the crisis, customers withdrew funds en masse and on\na large scale. Hundreds of people queued for hours to drain all their\nsavings. This situation left BCA, which was no longer trusted by the\npublic, on the brink of bankruptcy. The chain of crises peaked in May\n1998.<\/p>\n
The closeness to Suharto apparently became a disaster for Salim at\nthat time. The emergence of anti-Suharto sentiment, stemming from the\nwidespread economic crisis turning into political turmoil, dealt a\nsevere blow to Salim. The public, aware of their closeness, made Salim a\ntarget. This occurred after demonstrations turned into racial riots on\n13 May 1998.<\/p>\n
That day, Jakarta and its surroundings were hit by riots, looting,\nand arson against houses, shop buildings, and many vehicles (Kompas, 14\nMay 1998). This action was carried out by provoked masses. They targeted\nbuildings and vehicles owned by Chinese people, even targeting the\nChinese individuals themselves.<\/p>\n
Jemma Purdey in Anti-Chinese Violence in Indonesia 1996-1999 (2013)\nexplains that the emergence of racial sentiment against the Chinese was\ncaused by stereotypes that they deserved to be hated simply for being\nwealthy and close to the Suharto regime. And the central figure\nassociated with that description was Sudono Salim.<\/p>\n
\u201cThe companies of the cukong and Suharto\u2019s family were the main\ntargets of burning and looting. Bank Central Asia, owned by Liem Sioe\nLiong, was the primary object of attack,\u201d wrote Ricklefs.<\/p>\n
Richard Borsuk and Nancy Chng in Liem Sioe Liong and the Salim Group\n(2016) reveal that although targeted by the mob\u2019s fury, Sudono Salim,\nhis wife, and several children were in the United States accompanying\nSalim for eye surgery. In Jakarta, only Anthony Salim was working at\nWisma Indocement on Jl. Sudirman.<\/p>\n
Anthony at that time did not dare to go home to his father\u2019s house in\nthe Roxy area. Because the mob riots also targeted Chinese residential\nareas. It was feared that if Salim stayed at home, he could be\nkilled.<\/p>\n
That prediction then came true. In the morning of 14 May, Anthony\nreceived news that his father\u2019s house was visited by a group of\nthreatening-looking youths, armed with jerry cans of fuel and tools.\nThey wanted to enter Liem\u2019s luxurious home.<\/p>\n
Anthony was helpless. He immediately ordered the security guards to\nallow the mob to enter and vandalise the house, rather than resisting\nand causing bloodshed.<\/p>\n
\u201cIn an instant, all the cars in the garage were burned, including the\ncontents of the house. They burned the furniture, removed paintings, and\nransacked the rooms. They even scrawled inappropriate words on the\nhouse,\u201d Anthony told Richard Borsuk and Nancy Chng.<\/p>\n
After a few minutes of doing that, black smoke quickly rose high from\nSalim\u2019s residence. On the streets, Salim\u2019s photos were pelted with\nstones and burned by the angry mob (Kompas, 15 May 1998).<\/p>\n
Seeing the dire situation in Jakarta, Anthony immediately thought of\nleaving his office. He feared that his office would suffer the same fate\nas his house. He then went to Halim Airport to head to Singapore using a\nprivate jet. From there, Anthony monitored his business developments\nafter those difficult times.<\/p>\n
After the riots subsided and Suharto finally stepped down, BCA\nsuffered the most severe losses. There were 122 damaged branches,\nconsisting of 17 offices completely burned, 26 branches damaged and\nlooted, and 75 branches damaged but not looted. Then, there were 150\nATMs damaged and their cash taken, resulting in losses of Rp 3\nbillion.<\/p>\n
Besides BCA, Indofood also came under attack. Its factory in Solo was\nlooted and burned, incurring losses of Rp 42 billion. Its distribution\ncentre in Tangerang was also destroyed by the mob. Only Indocement\nmanaged to hold out.<\/p>\n
Nevertheless, the severe blow occurred in the banking business\nempire. A week after Suharto stepped down on 21 May 1998, BCA was taken\nover by the government because its financial condition was increasingly\nbleeding and unsalvageable. The government through the National Banking\nRestructuring Agency (BPPN) officially made BCA a BTO (Bank Take\nOver).<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/the-story-of-the-collapse-of-the-salim-business-empire-after-three-decades-of-prosperity-1777824515", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }