Sukanto Tantoto’s company Sateri was listed in the HK exchange in October 2010. Read about the release here
The company produced a disclosure before the public offering http://www.hkexnews.hk/listedco/listconews/sehk/2010/1208/01768/ewpsater-20101121-10.pdf
The document shows Sukanto Tantoto is involved with several allegations. All of these are self confessions, presumably on advice from lawyers that it’s better to disclose them up front.
This is Sukanto Tanoto’s self confessed sins
(1) 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. The shares were pledged by Beckkett Pte Ltd to Deutsche Bank as collateral for a US$100 million loan granted to PT Asminco Bara Utama that went into default. Following an appeal in 2009 to the final court of appeal in Singapore, Beckkett Pte Ltd was successful in its claim and the amount of damages to be awarded to Beckkett Pte Ltd is pending assessment by the court. However in October 2010, Deutsche Bank won against Beckett (controlled by Sukanto Tanoto: http://www.thejakartaglobe.com/business/in-shares-battle-deutsche-bank-prevails-over-beckkett-in-singapore-high-court/399607)
Read also here : http://www.forbes.com/global/2007/1224/044.html
(2) PT Inti Indorayon Utama a pulp mill setup by Sukanto Tanoto, which was built at a small village Porsea nearby Lake Toba of North Sumatra. The mill however did not run smoothly with the local people, who argued that it had polluted the area, performed major deforestation and injustice land grabbing. From the beginning, the Indonesia’s first pulp mill was full of conflict history. The initial permit released contained land disputes, the quality of air and water around Asahan River degraded drastically, which was said to be responsible to certain skin diseases, reducing corp production and water contamination, was responsible for some landslide disasters in the area and released toxic chlorine gas during the 1993 boiler explosion.
The long saga between Tanoto’s Indorayon with local community ended up with the status of closing down during the President Wahid administration.
(3) PT Unibank Tbk and Sukanto Tanoto relating to our Ultimate Controlling Shareholder’s previous ownership of PT Unibank Tbk, an Indonesian bank. 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. 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.
Read the full story here
(4) Allegations relating to tax evasion in Indonesia made against the Asian Agri group of companies in Indonesia, a palm oil business group ultimately controlled by the Tanoto Family, with respect to the years 2002 to 2005.
Latest news: On Dec. 18, the Supreme Court of Indonesia ruled against one of the country’s richest men, Sukanto Tanoto, ordering his Asian Agri Group to pay a total fine of Rp 2.5 trillion (US$259.4 million) for tax evasion. Its former tax manager Suwir Laut was sentenced to two years imprisonment, overruling a lower court decision which had acquitted him.
(5) Illegal logging and rainforest clearing in Indonesia by PT Riau Andalan Pulp & Paper, and APRIL. A report produced by Eyes on the Forest stated that, despite being in business for 17 years and having access to pulpwood supply concessions covering more than 10% of Riau province’s landmass (940,000 hectares), APRIL has continued to rely on clearance of natural forest for its pulping business as late as 2012. At least 140,000 hectares of natural forest were lost in all APRIL supplier concessions between 2008/2009 and 2011 in Riau; equivalent to the loss of 5% of the natural forest remaining in 2008/2009 and 27% of the total forest lost between 2008/9 and 2011. APRIL knowingly pulped natural forest wood from concessions whose licenses were issued through corrupt practices. Ten of twelve APRIL wood suppliers operating in the company’s main wood supply area, Riau Province’s deep peat Kampar Peninsula, obtained their licenses from the heads of Siak and Pelalawan district. Both were convicted in high profile cases for corrupt practices in issuing these licenses and are currently in prison. APRIL suppliers also received annual cutting licenses from three Riau Forestry Agency chiefs who since then have been sentenced to prison terms for graft by the corruption court. APRIL lost its interim FSC Controlled Wood certificate for non compliance in 2010 after an audit by the Rainforest Alliance.
Read a report here in December 2012, APRIL is still found pulping Indonesian rainforests
(6) Ownership and other disputes involving, and allegations of embezzlement made by, relatives of Sukanto Tanoto (wife and children of Polar Yanto Tanoto) relating to shares in certain companies (Indorayon, RAPP, APRIL) controlled by Tanoto in 1997. A legal settlement was reached with such relatives in 2002 in respect of the claims relating to shares in certain companies controlled by Sukanto Tanoto in 1997. Notwithstanding this settlement, these relatives of Sukanto Tanoto have continued to make allegations in the media from time to time.
Also read here IPO Watch on Sateri
Here is a summary from http://www.endgame.org/dtc/r.html
RAJA GARUDA MAS
Conglomerate headed by Sukanto Tanoto (Tan Kaung Ho).
Set up a Bermuda-based holding company called Asia Pacific Resources International Holdings Ltd (APRIL), which sold $150 million in stock in the U.S. and Canada to set up operations in Indonesia, India, and China (Carrere and Lohman, Pulping the South, p. 220). Joint venture with UPM-Kymmene of Finland. See also Asia Pacific Resources.
Riau Andalan, the largest single-line pulp mill in the world, near Pakanbaru, Sumatra, Indonesia. Will produce 750,000 tons of pulp per year, integrated with a 280,000 ton-per-year paper mill. Built in 1994 at a cost of $750 million — $750,000 per job provided. Will be cutting 50 species of native hardwoods while waiting for 160,000 hectares of acacia and eucalyptus plantations to grow. Two thirds of its production will be for export (Carrere and Lohman, Pulping the South, p. 211, 220).
Indorayon mill in northern Sumatra, Indonesia. Subsidized with a $500 million loan from Indonesia’s Domestic Lending Board (Carrere and Lohman, Pulping the South, p. 212).
Began with 86,000 hectares of indigenous pine planted during the Dutch colonial period, but has expanded to cut additional areas, including the 150,000 hectare Harionboho Protection Forest (p. 220). In 1987, Indorayon took the Batak people’s pasture lands and a graveyard, and planted them in eucalyptus; in 1989, Batak women ripped up tree seedlings in response to several rapes (p. 225-226). A chlorine tank explosion in November 1993 and hazardous gas leaks led hundreds of protestors to burn 100 houses, a radio station, and vehicles (p. 223-224). Indorayon has polluted the Asahan River, and depleted fisheries and village water supplies. Indonesian authorities, including the military, have defended Indirayon (p. 226).
ASIA PACIFIC RESOURCES INTERNATIONAL HOLDINGS LTD. (APRIL)
Bermuda and Singapore
Bermuda-based, Singapore-headquartered holding company for the Indonesian conglomerate Sinar Mas. Sold $150 million in stock in the U.S. and Canada to set up operations in Indonesia, India, and China (Carrere and Lohman, Pulping the South, p. 220). See also Sinar Mas.
“UPM-Kymmene of Finland and Singapore-based Asia Pacific Resources International Holdings Ltd.(APRIL), have agreed to establish a strategic alliance to develop jointly their respective fine paper operations in Europe and Asia.
In Europe, UPM-Kymmene will hold 70% and APRIL 30% of a new company called UPM-Kymmene Fine Paper, which will comprise UPM-Kymmene’s fine paper units, Nordland Papier in Germany and Kymi in Finland. This new company will be the largest fine paper producer in Europe with a combined annual capacity of 1.7 million tonnes of paper and 460,000 tonnes of related pulp. Similarly, in Asia, APRIL will hold 70% and UPM-Kymmene 30% of a new company, APRIL Fine Paper, which will comprise APRIL’s paper mills under construction in Sumatra, Indonesia and China. These mills are expected to come into production in 1997 and 1998. Even if APRIL states that it is not involved in logging in rainforests, the fact is that the material basis of the new alliance is the nearby Riau Pulp pulpmill, whose production is almost completely based on rainforest wood. The mill, which started operations in 1994, produced last year about 600,000 tonnes of short-fibre pulp from natural forests. Until now the company has only planted 7,000 hectares of acacia, which are not only totally insufficient to feed the giant mill, but additionally will only be ready for logging by the year 2002. It is expected that the mill will run on rainforest wood, which will be needed at a rate of over 3 million m3/year. This will mean clearcuts of at least 25,000 hectares of rainforest each year and a total of 200,000 hectares.
APRIL has also a bad reputation in the social area. Land acquisitions by the company have caused serious conflicts with local communities and working conditions in its pulp and paper mills are poor. (World Rainforest Movement Bulletin No. 6, citing Friends of the Earth-Finland Forest Group. Press release 15.9.97).