Liem Sioe Liong's Salim Group

3 ideas

1. Liem Sioe Liong's rise and 1998 fall

   Liem, a Fujian migrant who reached Java in 1938, supplied Suharto's Diponegoro army division in Central Java and later won state-granted positions under Suharto's New Order, including the Bogasari flour mill, a share of clove imports, and Bank Central Asia, which had Suharto's children as shareholders. When Suharto fell in May 1998, rioters burned Liem's Jakarta house and depositors ran on BCA. The state took over the bank, and the family surrendered major assets to settle tens of trillions of rupiah in emergency central-bank liquidity it had used.

2. The cukong: minority capital, ruler's protection

   A cukong is an ethnic-Chinese businessman who manages capital and operations for a political patron who cannot openly own businesses. The patron supplies licenses, monopolies and protection. The cukong's minority status makes him useful: he can never become a political rival, so the ruler can let him grow very rich without feeling threatened.

3. Offshore hedge against home-country political risk

   Starting in the 1980s, the Salims built a Hong Kong-listed vehicle, First Pacific, that held assets outside Indonesia and away from domestic political exposure. After 1998, this offshore base and the retained food business Indofood let Anthony Salim rebuild while the Indonesian bank and many domestic holdings were lost.

Save and mark ideas in the app