| BUSINESSWEEK ONLINE : JUNE 7, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- ASIAN COVER STORY
How James Riady Makes Himself Indispensable (int'l edition) They call him Boy Wonder--a favored son in a nation that has turned against its crony class. When other ethnic Chinese business leaders were still sweeping up broken glass after last year's riots, James T. Riady was already lobbying overseas Chinese investors as President B.J. Habibie's new ''business ambassador.'' In January, Habibie's government gave Riady's Lippo Bank $500 million in recapitalization funds before eight other qualified banks knew the money was available. All the while, his father, Mochtar Riady, was hedging the family's bets by courting opposition leaders. As deputy chairman and chief executive of Lippo Group, 42-year-old James Riady is the czar of Indonesia's new money politics. He saw the economic crisis early, anticipated political turmoil, and quickly backed the right horse. Riady has campaigned hard to win back ethnic Chinese investors who have parked capital overseas until the June 7 election is over. ''I have taken personally a bigger role [in public life] than before,'' Riady said in an interview. In return, Habibie is custom-tailoring some regulations to fit Lippo's business needs. In January, Habibie backdated a banking decree to smooth the way for Lippo Bank's recapitalization. He also exempted publicly listed real estate giants from a limit on property holdings--much to the benefit of three Riady-controlled companies. Riady vigorously denies that he is a Habibie crony. But Suharto's successor has clearly boosted Lippo's chances of survival. Riady already has put up the $100 million he is required to contribute to Lippo Bank's recapitalization. Now, U.S. insurance giant American International Group Inc. is negotiating for a $300 million stake in a unit of Lippo Life--a deal that would let Riady pay off the $150 million in debt spread through his 40 companies. The elections are crucial to Riady. Company execs say group assets, now valued at about $4 billion, could appreciate by 50% in dollar terms if investors return to the market, which lists 14 Lippo companies. That would mark a welcome turnaround for a group whose annual revenues have fallen from $5 billion before the crisis to $1.5 billion today. Riady's survival is also a measure of his acumen. He saw tighter money coming in January, 1997, and started raising cash. When the rupiah depreciated by 80%, Riady quickly sealed a partnership with Habibie. Riady learned to mix money and politics in--of all places--Arkansas, where his father invested in the 1980s and courted a governor named Bill Clinton. The younger Riady was later implicated in U.S. campaign-finance scandals. Even so, the Riadys' climb to prominence in U.S. politics has impressed Golkar and Indonesian business leaders and convinced even Islamic opposition leaders that they will need their own Boy Wonders if they get into power. Amien Rais, an opposition leader, says he wants to see ethnic Chinese as ministers in the next Cabinet. ''This would bring back the Chinese,'' he says. ''We know we can't go it alone.'' James Riady can take some of the credit for getting that message across. By Michael Shari in Jakarta _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 RELATED ITEMS Indonesia's Elections: A New Beginning? (int'l edition) ASIAN COVER IMAGE: Indonesia's Elections: A New Beginning? CHART: The Economy Is Bottoming Out... GRAPHIC: Partial Democracy How James Riady Makes Himself Indispensable (int'l edition) ONLINE ORIGINAL: Riady: ``Lippo Is Not Like the Stereotype'' (int'l edition) INTERACT E-Mail to Business Week Online | |||
