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Navigation Primary Navigation Home Singapore Asia Pacific World Business Entertainment Sports Technology Top Stories Most Popular Secondary Navigation Singapore Asia Pacific World Search Search: Bakrie squirms as crisis slams Indonesia AFP - Wednesday, November 19 JAKARTA (AFP) - - Just months ago he was the undisputed king of Indonesia's tycoons, but now powerful Welfare Minister Aburizal Bakrie is struggling to hold together an empire crumbling amid the global credit crunch. The 62-year-old billionaire, a key financier of President Susilo Bambang Yudhoyono's 2004 election campaign, is fast losing his once-formidable political clout as stocks across his empire plummet, analysts said. "Bakrie has lost his tenure as a major political heavyweight," political analyst Dewi Fortuna Anwar told AFP. Yudhoyono probably still feels indebted to Bakrie for funding his campaign, but the tycoon's continuing influence ultimately relies on how much money he can spare for future political battles, Anwar said. "He's now a minister, but if by (the general elections of) 2009 his financial issues can't be overcome... he may be seen as a political liability," he said. Until recently, Bakrie was considered the richest man in Indonesia with a family fortune estimated by Forbes Asia magazine at 5.4 billion dollars, from holdings that span palm oil to coal and construction. He has seemed untouchable as the tycoon-businessman with his finger in almost every pie. Even when one of his companies allegedly triggered a devastating mud vulcano while drilling for gas in East Java two years ago, killing 13 and displacing more than 36,000, he was immune from responsibility. But now he is answering to the markets as the global economic slump puts the brakes on the spectacular commodities boom that had fuelled his family's profits. His debts have piled up and creditors have started selling shares offered as collateral by holding company Bakrie & Brothers, economists said. Trading in stocks in six Bakrie-linked companies was controversially suspended in early October after they lost between a quarter and 40 percent of their value in one day amid rumours he was in default. With around 1.2 billion dollars in debt due next year, Bakrie & Brothers is scrambling to sell assets to the highest bidder even as those assets' share prices plummet. The main prize on offer is a 35-percent share in coal giant Bumi Resources, the world's largest exporter of thermal coal and a key money-spinner in the Bakrie family empire. The likely buyer is private equity group Northstar Pacific Partners, the Indonesian affiliate of Texas Pacific Group, which is in talks to pick up the stake for 1.3 billion dollars. The problem for Bakrie is that those talks began when Bumi's share price was around three times higher than it is now. The stock has has plunged more than 50 percent this month and 88 percent since June. Analysts said that even though his political star is falling almost as fast as Bumi's share price, Bakrie is still able to call in some big favours from his friends in politics. Yanuar Rizky, an analyst with the Aspirasi Indonesia Research Institute, said Bakrie used his political connections to freeze trade in Bumi shares for a month as Bakrie & Brothers cobbled together the Northstar deal. "It's very clear this was an intervention by the government... it broke the law," Rizky said. Stock exchange chief Erry Firmansyah has denied there was any political interference behind the suspension. The trading halt was only lifted after well-respected Finance Minister Sri Mulyani Indrawati, formerly of the International Monetary Fund, reportedly threatened to resign in a tense meeting with Yudhoyono. An 824.67-million-dollar buyback plan announced by Bakrie & Brothers last week slowed -- but did not arrest -- the decline in Bumi shares. Bumi stocks tumbled another 9.5 percent to 950 rupiah (eight cents) on Tuesday, after Bakrie & Brothers confirmed it had defaulted on 144.9 billion rupiah (12.5 million dollars) of short-term loans to two local companies. Trading in Bakrie & Brothers stock resumed Tuesday for the first time since their October suspension and swiftly fell almost 10 percent. Investors fled after the company announced the Bumi deal with Northstar may be adjusted due to a share "price discrepancy." While many here have relished watching Bakrie get snapped like a twig in the global economic maelstrom, Econit Advisory Group economist Hendri Saparini warned that the source of his empire's troubles -- the end of sky-high commodity prices -- signals tough times for the broader Indonesian economy. "Sixty percent of Indonesian exports are reliant on commodity prices. So when prices are declining, it's a problem," she said. Email Story IM Story Printable View Blog This Recommend this article Average (0 votes) Sign in to recommend this article » Most Recommended Stories » Related Articles: China's Economy Oz Minerals warns on profit, possible writedownsReuters - 1 hour 10 minutes ago US sees long road to recovery as economic gloom spreadsAFP - 2 hours 17 minutes ago Ecuador to impose raft of import controlsAP - Wednesday, November 19 Online sales growth in October slowest on recordAP - Wednesday, November 19 Related Articles: Business BofA CEO: There are '1 too many' Detroit 3 membersAP - 28 minutes ago Japan Hot Stocks-Mazda gains as Ford to sell stakeReuters - 33 minutes ago Nikkei edges down as global recession fears weighReuters - 50 minutes ago Seoul shares open higher but quickly lose gainsReuters - 50 minutes ago South Korean won rises early, firmer stocks helpReuters - 55 minutes ago Enlarge Photo Bakrie squirms as crisis slams Indonesia Related Photos Slideshow Full Photo Coverage: Business & Economy Related Full Coverage China Economy china economy All Full Coverage Most Popular – Business Viewed Citigroup to slash 50,000 jobs, expenses worldwide Exercise, sleep cuts cancer risk: study Obama and McCain pledge 'new era of reform' Acinetobacter is emerging hospital superbug: study Earth would be heading to a freeze without CO2 emissions View Complete List » Search: Home Singapore Asia Pacific World Business Entertainment Sports Technology Top Stories Most Popular

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