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Indonesian Magnate Mochtar Riady:
'When Everyone Gets Out, I Go In'

This prominent ethnic Chinese Indonesian tycoon has written the book on the art of mixing business and politics. How exactly has he created his legend?

Photos: Ming-Tang Huang

Mochtar Riady has experienced three wars during his long life: World War II, the Chinese Civil War, and Indonesia's War of Independence. And this magnate's career has experienced three main phases, as Indonesia's best-known banker, as the ethnic Chinese capitalist who gained access to the White House, and now as an Asian real estate tycoon with interests in Seoul and Chengdu.

The 81-year-old businessman typifies an Asian godfather, with his chameleon-like past and innate skill in wheeling and dealing. From his rags-to-riches story, it is easy to understand that if Taiwanese businessmen want to gain a foothold in the Indonesian market, they will have to deal with the complex interlocking relationships between political and business circles common to most emerging countries and be ready for both risks and opportunities.

Whenever this emerging nation has faced widespread economic distress and a multitude of problems, Lippo Group founder Riady has built a huge market by being the earliest to invest heavily.

"I started doing business when I was in my twenties. My business in a sense was born with the Indonesian republic," says a proud 81-year-old Riady, sitting in a spacious office in his Mochtar Riady Center for Nanotechnology and Bioengineering.

After World War II at the age of 18, Riady became the head of an East Java overseas Chinese students' association and enthusiastically organized the students to resist the Dutch colonial authorities. The Dutch arrested Riady and threw him into prison before expelling him from the country. He took the opportunity to return to China and study at Nanjing Central University. One of his classmates there, K.T. Li, eventually became known as the father of technology in Taiwan.

When the Nationalists retreated to Taiwan in 1949 after losing the Chinese Civil War to the communists, the 20-year-old Riady ended up in Hong Kong. He then returned to Jakarta, where he got his first experience as a clerk in a car shop and then worked in the department store founded by his father-in-law while also serving as a shipping agent. 

Growing Bank's Total Assets 390-fold

When he first entered Indonesia's banking sector, Riady targeted markets that everybody else frowned upon, soliciting deposits from Indonesia's bicycle industry and Minnan Chinese.

In the early 1970s, Indonesia's government encouraged small banks to merge and restructure. Sensing an opportunity after having worked in the field for over 10 years, Riady raised some capital and acquired a number of banks to form Bank Panin in 1971. The bank also received approval to deal in foreign exchange. Within three years, Riady increased the bank's assets 20-fold, turning it into Indonesia's biggest private financial institution and springing himself to fame.

During that period he also gained a growing number of influential Taiwanese friends, and developed strong relationships with leading entrepreneurs Jeffery Koo (ChinaTrust Group), Y.S. Miao (Lien Hwa/Mitac Group), and Kao Chin-yen (Uni-President Group).

In the mid-1970s, Riady gained the attention of ethnic Chinese tycoon Liem Sioe Liong, also known as Sudono Salim, who at the time controlled 5 percent of Indonesia's GDP. He was hired by Liem to take over as the Bank of Central Asia's president and chairman, and the bank's assets grew 390-fold over a 15-year span. Riady's exploits established him as one of Indonesia's top bankers and turned him into a household name.

By the time he was 53, Riady decided that he no longer wanted to work for anybody else, and he formed the Lippo Group with Liem. The group's Lippo Bank, which had been in business since 1948, safeguarded the core cash flow of the group's diversified interests, from retailing and property development to media.

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