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How BCA Makes Djarum Bosses More Rich

The 1997-98 monetary crisis was a nightmare for entrepreneurs. But for Robert Budi Hartono and Michael Bambang Hartono, the currency crisis marked the beginning of their coronation on the list of the richest people in Indonesia.

Forbes recently released a list of the 50 richest people in Indonesia. The Hartono brothers were again included in the list. Remarkably, the owner of the Clove Cigarette Company Djarum occupies the richest people in Indonesia in the last 10 years.

The value of the Hartono brothers' wealth is valued at 35 billion USD in 2018, up 9.37% from 32 billion USD last year.

The Forbes report notes that 70% of the total value of wealth comes from PT Bank Central Asia Tbk (BCA).

"The ever-growing course of action has contributed to BCA's contribution to Hartono's wealth." Last year, BCA's share in Hartono's wealth was only 50%, "Taufik Darusman told Tirto, editor-in-chief of Forbes Indonesia.

The driving force behind the wealth of the Hartono brothers comes not from the cigarette sector, but from BCA - Indonesia's largest private bank - and dozens of other companies active in various fields. If you rely on cigarettes only, it is difficult for the Hartono brothers to become the richest people in Indonesia, because the cigarette trade in which Hartono is involved is not the most important. The biggest cigarette company in the country is not Djarum, but Gudang Garam and HM Sampoerna.

The Hartono brothers may be lucky to have a BCA. Without the currency crisis, the Hartono brothers might not be the richest in the country for 10 years. The BCA bank was created on 21 February 1957 by Sudono Salim, founder of the Salim group. But on the way, BCA has proven difficult to develop.

"In the mid-1970s, BCA had only two branches and ranked 23rd out of 58 private commercial banks," wrote Richard Borzuk and Nancy Chng in Liem Sioe Liong & Saling Group: Suharto's Commercial Pillar (2014: 214 ).

The BCA's situation began to improve when Sudono took Mochtar Riady in 1975. At that time, Mochtar was given the nickname "bank doctor" after the relaunch of three banks, namely Prosperity Bank, Bank Buana and the Bank Panin.

BCA has also transformed. BCA fired like a meteor and helped bring Sudono Salim into the ranks of Asia's richest. In the hands of Mochtar Riady, BCA's assets had reached nearly US $ 3 billion in the early 1990s, beginning in the early 1990s. It had invested US $ 1 million.

In 1998, a currency crisis occurred. The deterioration of the exchange rate of the rupee against the dollar has led to a massive outflow. This causes the collapse of several banks. The BCA has also been affected. The large cash outflow made by BCA must become a patient of the Indonesian Bank Restructuring Agency (IBRA). Ownership of BCA shares has also changed. Up to 92.8% of BCA's shares are held by the government, with the rest being other parties.

Gradually, the government began to release its shares, starting with the listing of BCA's initial shares on May 31, 2000.

As of September 30, 2007, the central government no longer held shares in BCA.

At that time, 51.15% of BCA's shares were held by the consortium consisting of Farindo Investments Ltd and Farallon Capital Management LLC, belonging to the Djarum group. The rest, 46.72% were made public and 1.76% belonged to Anthony Salim. At present, Djarum Group - through PT Dwimuria Investama Andalan - holds 54.94% of BCA's capital. The remaining 45.06% are made public.