||This article may require cleanup to meet Wikipedia's quality standards. The specific problem is: the article requires extensive copy editing to approximate grammatically correct English. (August 2013)|
(Chinese Indonesian name)
|Hanyu Pinyin||Chén Jiānghé|
Sukanto Tanoto (traditional Chinese: 陳江和; simplified Chinese: 陈江和; pinyin: Chén Jiānghé; born in Medan on 25 December 1949) was said in 2008 as the richest Indonesian, according to the Forbes magazine with the total net worth of US$ 2.8 billion (ranked 418th on Forbes 500 list). Started as a supplier of equipment and materials for the state own oil firm Pertamina, Sukanto Tanoto then moved to the forest industry in 1973. He acquired public pulp and paper business Asia Pacific Resources International on New York Stock Exchange, which then delisted in 2001. His current business vehicle is Raja Garuda Emas International or Royal Golden Eagle International (RGEI), a holding company with its activities ranging from paper, palm oil, construction, and energy business sectors.
Born on Christmas Day 1949, Sukanto Tanoto was the eldest of seven boys. His father was an immigrant from the Putian city Fujian province of the mainland China. In 1966, when he was just 17 years old, Tanoto's education was suddenly put into an abrupt stop, because all local Chinese schools were shut down by Suharto after he took over the presidency. Tanoto immediately conducted his first business. "I was studying in a Chinese school. I wasn't allowed to go to a national school because my parents held Chinese citizenship. I was considered a foreigner. I never learnt Bahasa Indonesia formally," Tanoto recalls.
Working for 16 hours a day, the young Tanoto slowly moved from a common trading to snare contracts in building gas pipelines for multinational companies. His luck began to show up during the 1972 oil crisis. Oil prices went hike and oil producers rapidly expanded their operations. Tanoto's contracts grew dramatically and he managed to cash in his first US 1 million dollars.
With some capitals at hands, Sukanto Tanoto tried to force his luck on bigger business. Tanoto noticed that Indonesia exported wooden logs, which were then converted into plywood abroad in countries like Japan or Taiwan and then imported back to Indonesia with higher costs. Realizing this inefficiency and also an opportunity, Tanoto then wanted to start business in the plywood industry. However, he first needed a permit.
In the Suharto's administration era, it was a common practice to conduct business with politicians, who in turn were army generals, to ease permit applications. A skeptical army general, who at first doubted Tanoto's business plan, agreed to give him a 'permission' with a requirement that Tanoto must report back to him when the factory was finished. In 10 months, Tanoto built his first pulp mill, Inti Indorayon Utama in the North Sumatra province. The army general was impressed and he alerted the country's top leader. On 7 August 1975, Suharto descended to Medan to inaugurate the factory. The new pulp industry initiated Tanoto's business with Suharto, which swiftly made himself as a new Indonesian tycoon in the 1980s.
Sukanto Tanoto was a self-educated entrepreneur. He felt pity that he could not continue his education. He learned English word-by-word using a Chinese-English dictionary. In the mid 1970s, when he had established his business empire, he finally went to a business school in Jakarta. Feeling unsatisfied, he continued to study at INSEAD, a reputable business school in Fountainbleau, France. The feeling of having a dropped-out school makes him enthusiastic on pursuing more education. He makes a frequent visit to management courses at top universities, such as Harvard, Stanford, Kellogg, Wharton, Carnegie Mellon, etc., which he calls it a 'management holiday'.
In the mid 1990s, Tanoto and his family relocated to Singapore and is having its base operation there. The Indonesian press speculated over this move that Tanoto was trying to seek safe place as a financial fugitive. Tanoto denies the allegation and is arguing that the relocation is merely for the effectiveness to meet with his international clients. He claims that he is still holding Indonesian passport and citizenship.
Raja Garuda Mas International
With Raja Garuda Mas International (RGM International) holding company, Sukanto Tanoto controls his business empire. The company holds the Pacific Oil & Gas (a private energy resource company who runs in Indonesia, Singapore, China and Hong Kong), Asia Pacific Resources International Holdings Limited (or APRIL, a producer of fibre, pulp and fine paper), Asian Agri (an agrobusiness industry which owns 20,000 hectares of oil palm, rubber and cocoa plantations in Indonesia, Philippines, Malaysia and Thailand), PEC-Tech (a construction and logistic service company), and Sateri International (a producer of viscose fibre and dissolving pulp, headquartered in Shanghai).
Asia Pacific Resources International (APRIL)
Located in the Riau Province of Sumatra. APRIL is a pulp mill with a capacity of 2.0 million tonnes per year, making it the largest pulp mill in the world. The company claimed to operate based on a sustainable forest management with a green label stating the use of plantation wood. However, the company got a forest concession from the government, allowing it to clear large scale native forests in the order of 70,000 hectare a year and converting it to a wood plantation. While the company waits for its plantations to grow, the native forest provides valuable wood for its mill. Investigations into four areas of natural forest clearance in Sumatra demonstrate that APRIL’s operations are driving the clearance of High Conservation Value Forest both within and outside APRIL’s concessions. APRIL lost its Forest Stewardship Council (FSC)'s certification in April 2010. And in September 2011, Fuji Xerox ceased selling paper manufactured by APRIL.
Corporate responsibilities and philanthropic activities
Having learned hard experience with Indorayon, Tanoto began to establish a corporate social responsibility (CSR) along with his other pulp business in Riau province. Through Riau Andalan Pulp & Paper (RAPP), Tanoto built schools, established a farming system to teach villagers an alternative cultivation than the slash-and-burn technique and made regular sustainable reports to NGOs, such as the World Wildlife Fund after the organization concerns over the conservation of forests in Riau province.
Sukanto Tanoto also set up The Tanoto Foundation, which awards Tanoto Foundation Professorship Award. In 2007, the award worth USD 130,000 was granted to two Indonesian academic scientists which have given their efforts to enable technological research programs for the society.
Sukanto Tanoto donated to the building of the INSEAD library in Singapore in 2005, the library was named Tanoto library. He also donated the Tanoto Professor of Diabetes Research at the Duke-NUS Graduate Medical School in Singapore in 2009. Sukanto Tanoto is a regular donor to Carnegie Mellon, Tanoto and his wife Tina is listed as The Highlands Circle at Carnegie Mellon, which means that Tanoto has donated more than $1 million to the university. In 2011, he donated the Tanoto Professor of Electrical and Computer Engineering position at Carnegie Mellon.
- Legal disputes since 2001 relating to a claim brought by Beckkett Pte Ltd, a company which is indirectly 29% owned by Sukanto Tanoto, against, among others, Deutsche Bank. The claim relates to an alleged disposal by Deutsche Bank, without due process and at an undervalue, of the pledged shares owned directly or indirectly by Beckkett Pte Ltd in PT Swabara Mining and Energy, PT Asminco Bara Utama, PT Indonesia Bulk Terminal and PT Adaro Indonesia. In October 1997, Deutsche Bank agreed to provide a US$100 million loan to Sukanto Tanoto, through one of his companies, Asminco. The bank received the 40% share in PT Adaro Indonesia as collateral. In February 2002, the bank sold the Adaro stake to PT Dianlia Setyamukti (DSM) in a private deal following the failure of Asminco to repay its debt. After selling other collateral the bank was only able to retrieve $46 million. However, Sukanto Tanoto demanded the return of his shares, claiming the transaction between DSM and the bank was illegal. In 2007, The Singapore Court declared Deutsche Bank won against Beckett 
- PT Unibank Tbk. Sukanto Tanoto took over the United City Bank from its previous owner, James Semaun, and changed its name to Unibank in 1990. At the time of the 1997 Asian financial crisis, he turned the bank into a publicly listed company with total assets of IDR 1.9 trillion. At the time of this transaction, he and his partner owned 25 percent of the bank’s shares. Unibank was considered healthy by the Bank Indonesia and Indonesian Bank Restructuring Agency in 1997 and did not enter the recapitalization program. Interestingly, only a year after going public Unibank started showing structural problems and was placed under the Bank Indonesia’s ‘close supervision’ category. It was later revealed that some 51% of Unibank's total assets were tied up in loans to companies linked directly or indirectly to Tanoto. By October 2000, Unibank had a capital-adequacy ratio of negative-221.43%, and its capital was Rp2.41 trillion in the red. On August 21, 2001, two months before its assets were legally frozen by government regulators, 73% of Unibank shares, or 2.47 billion shares valued at Rp61.8 billion, were sold in a shadowy transaction on the Jakarta Stock Exchange. Tanoto's securities house, PT Unisecurindo Abadi, was the most active trader that day, and Unibank notified regulators about the change in ownership only days before its state-ordered closure. That raised eyebrows with some stock-market analysts, who believed the move was engineered to protect Tanoto from his obligations as the controlling shareholder. Unibank was closed in 2001 with associated outstanding debts of US$230 million. Sukanto Tanoto successfully avoided being held liable for the costs of closing Unibank. By the time the Bank Indonesia finally closed it down, Tanoto was no longer the owner, and none of the shareholders owned more than five percent of its total shares. Tanoto had no liability to the government, despite the fact that Indonesian Bank Restructuring Agency had to repay customer deposits of IDR 3.1 trillion or about USD 442 million. As a result of Indonesian Bank Restructuring Agency’s own regulations it was forced to pay up to IDR 70 billion, or about USD 10 million, towards deposits owned by several subsidiaries of Tanoto’s RGM Group.
- Sukanto Tanoto is being linked to a corruption scandal over alleged improper lending activities at the government's biggest financial institution, Bank Mandiri. The country's largest lender began operations in August 1999, formed from the merger of four state banks devastated by the 1997 financial crisis. Mandiri is 68% owned by the government, and its role in the purchase of distressed assets from companies controlled by businessmen linked to former president Suharto has come under new scrutiny. Mandiri Bank's former president director, vice president and corporate banking director were all tried over an $18.5 million lending scandal but were exonerated from all charges in South Jakarta District Court in February 2006. Together with state-owned Bank BNI, the country's second-largest, Bank Mandiri accounts for the bulk of the Rp27 trillion of outstanding non-performing loans in Indonesia's banking industry, which represent about half of the total assets in the banking system. Bank Mandiri's NPLs stand currently at a whopping 26.6%. Sukanto Tanoto's company APRIL had borrowed a total of $1 billion from a consortium of Mandiri, BNI, and Panin, Niaga, and Danamon banks to finance the development of its integrated paper-manufacturing plant known as Riau Complex.
- In December 2012, The Indonesian Supreme Court verdicts Asian Agri Group to pay Rp 2.52 trillion ($260 million) in back taxes and fines for tax embezzlement.
- Laurel Teo (2007-04-07). "From rags to US$2.8b fortune". Business Times Singapore. Archived from the original on 2007-07-05. Retrieved 2007-10-15.
- "Five Indonesians on 'Forbes' rich list". The Jakarta Post. 2008-03-08. Retrieved 2008-03-13.
- "Sukanto Tanoto and family". Forbes. 2006-08-06. Retrieved 2007-10-15.
- During the inspection, Suharto did asked a lot of questions to Tanoto, including the cost calculation, profits, labour and the reason why building a factory instead of exporting (see Teo 2007).
- "Energy Resource Development". RGM International. Archived from the original on 2007-10-11. Retrieved 2007-10-15.
- "Fibre, Pulp & Paper". RGM International. Archived from the original on 2007-10-11. Retrieved 2007-10-15.
- "Agro Industry". RGM International. Archived from the original on 2007-10-11. Retrieved 2007-10-15.
- "EPC and Logistic Services". RGM International. Archived from the original on 2007-10-11. Retrieved 2007-10-15.
- "Rayon and Speciality Pulp". RGM International. Archived from the original on 2007-10-11. Retrieved 2007-10-15.
- ABC Foreign Correspondent |url=http://www.abc.net.au/foreign/content/2011/s3283804.htm
- Indonesian Paper Giant APRIL’s Certification Status Suspended |url=http://ran.org/indonesian-paper-giant-april%E2%80%99s-certification-status-suspended#ixzz2Hr7K3lFj
- Fuji Xerox ceases procurement from Asia Pacific Resources International Limited (APRIL)|url=http://www.fujixerox.com/eng/company/ecology/topics/2011/0901_april.html
- "Pulp mills put heavy pressure on forests: Study". The Jakarta Post. 2002-02-09. Archived from the original on 2007-11-17. Retrieved 2007-10-15.
- "RI not giving enough toward research and development". The Jakarta Post. 2007-09-08. Retrieved 2007-03-13.
- A new chapter
- Asia Times http://www.atimes.com/atimes/Southeast_Asia/HJ14Ae01.html
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- Debt Settlement of Indonesian Forestry Companies
- "Asian Agri Ordered to Pay Back Tax". Jakarta Globe. 2012-12-29. Retrieved 2012-12-29.