Buddhadeb Bhattacharjee was in Jakarta on 25 August; there he signed an agreement with Benny Santoso of the Salim group. Under it, the group will be leased 5,100 acres in 24 Parganas to develop an industrial city, a knowledge city, a biotechnology park and a health city ' or, in old-fashioned language, estates for industry, information technology, laboratories and hospitals. A month earlier, the same group was given land for a housing estate in Howrah and another plot in Uluberia for a two-wheeler factory.
The Salim group is named after its founder Liem Sioe Liong, alias Soedono Salim (Chinese minorities in East Asia face local hostility; one way they cope with it is by adopting local names. Thailand forces foreigners to take on local names; thus Harbinder Singh would be locally called Sukornchik Thanpokai.) He was born in Haikou in Fujian province of China in 1916. When he was 15, he started a noodle-soup shop. Five years later, his father died. Those were the days of the great heroic struggle of the eventually triumphant Red army against the Kuomintang, which finally ran away to Taiwan; both armies were catching all the young men around and conscripting them. Rather than indulge in the holy war, Sioe Liong alias Salim ran away to join an uncle who had a provision store in Indonesia. But the store did not have much business. So he started peddling coffee: he would mill it at night, make little packets out of newspapers and hawk them during the day.
His break came in the late 1940s, when an armed revolt broke out against the Dutch who had returned to Indonesia after the defeat of the Japanese. Soeharto, who had joined a Japanese mercenary force, found himself out of work and joined Soekarno's rebel force. Liem came to know him and made himself useful smuggling arms. He also found good business in cloves, which are an expensive input into the murderous Indonesian biris. The two businesses made him rich.
But his real break came in 1965, when Soeharto overthrew Soekarno in a counter-coup. Soeharto was reputedly the world's most corrupt ruler of his time. When he abdicated in 1998, he was ranked the world's sixth richest person; his assets were estimated at $16 billion. He was also the most nepotic of men. Almost all his cronies were from his family ' half-brother Probosu-tedjo, cousin Sudwikatmono, sons Sigit Harjojudanto, Bambang Trihatmodjo and Hutomo Mandala Putra, and daughters Hardjanti Rukmana, Hediati Harijadi and Hutami Endang Adiningsih. But two were from outside the family ' Liem and Mohamed Hasan. Of the two, Liem was the closer, and he benefited more.
Indonesia saw a big oil-driven boom in the 1980s and 1990s. Like India in recent years, Indonesia then had a big payments surplus. It increased money supply at home; one of the most lucrative businesses in those circumstances was to take people's money and lend it out. Liong set up Bank Central Asia to do it, and gave Hardjanti Rukmana and Sugit Harjojudanto a 30 per cent share of the capital. In 1997, the bank had 788 branches and 8 million customers.
The bank gave Liem money to play with. So he set up noodle, flour and bread businesses. He also set up Indomobil Sukses Internasional to make cars, Indocement Tunggal Prakasa to make cement, and a resort in suburban Jakarta; altogether he had about 500 companies in Indonesia.
But to spread economic and political risk it was prudent not to put all one's eggs in the Indonesian basket. So Liem bought into QAF, a company that owned a supermarket in Singapore, and First Pacific Co in Hong Kong. First Pacific took a 49 per cent share in the Nandas' telephone company Escotel in the 1990s, and also invested in Smart Communications, a telephone company in the Philippines. Liem was not as rich as Soeharto, but was far ahead of any other Indonesian; his business assets were estimated to be $10 billion. His plans were even grander than his empire. He wanted to take half a million acres of swamp in Kalimantan, drain it and grow rice.
Then came the East Asian crisis of 1998. Capital flew out of Indonesia, and the rupiah collapsed; from 2,400 to the US dollar in July 1997, it went down to 11,500 a year later. There was a run on Bank Central Asia. Mobs destroyed 122 branches and 150 ATMs. There were terrible anti-Chinese riots all over Indonesia; Liong's villa in Jakarta was attacked. Indofood had $1 billion in overseas loans; Indocement had $830 million.
The empire could not come out of the crisis unscathed; but the Liem family managed it with aplomb. Liem Sieo Liong moved to Singapore; his son Anthoni took over the reins. The government took over Bank Central Asia; and since 90 per cent of its loans were to Salim companies, it came effectively to own them. The Indonesian Bank Restructuring Authority took over 107 Salim group companies, including 25 property firms, 24 plantations, 10 food and consumer product firms, nine oleochemical firms, five coal and granite firms, four sugar firms and one communications company.
It is difficult to get a picture of the Salim group today. Of the companies that went into the hands of IBRA, some were sold, some went back to the Salim group or were rumoured to have been sold to their frontmen, while some continue to be in a limbo; it is impossible to work out which belongs where. As far as I can see, the group's crown jewel, Bank Central Asia, is not back in the empire.
In the meanwhile, a new generation of entrepreneurs has occupied the business space in Indonesia. In finance, Hary Tanosoedibjo has brought his bank, Bhakti Investama, to the fore. The kretek or clove cigarette business hardly suffered from the crisis; Budi and Bambang Hartono, the brothers who own Djarum, have had much money to play with. The Salims' oleochemical plant was taken over by the Wings group of Hanny Sutanto.
Buddhadeb Bhattacharjee is right when he says that money knows no colour and that Salim's connection with Soeharto is history. If the Salim group has money at its command and can use it to develop the land the West Bengal government has given it, that is fine with me. What worries me is that the Salim group itself may be history. Seven years ago it ceased to exist; its remnants were taken over by the Indonesian government. Since then, Anthoni Salim has had time to rebuild, but what precisely he has rebuilt is unclear. In particular, I simply cannot find out what financial resources he can command. I am not in the business of finding out; there are a number of financial detective agencies which could. But the West Bengal government should have done due diligence ' and shown publicly that it had done so.
However, I am not worried about Liem Sieo Liong. He lives in Singapore; hale and hearty at 88, last year he threw a diamond wedding anniversary party which lasted two days and cost $350,000. Forbes valued him at $655 million. He certainly has money.