A CALL TO ARMS.
(Forbes Asia, December 22nd '08)
But that was before a 1995 call from a friend, Arbali Sukanal, chief executive of the state-owned Bapindo Bank, asking him what he thought about buying a bank. "Bapindo has a very small subsidiary, and it's got problems," Sukanal said. "If you want it, maybe I can help you get it." The $20-million-in-assets Bank Karman was mismanaged, antiquated and swimming in debt. Bank Indonesia, the country's central bank, was holding a competitive bidding for it. "You know my capabilities," said Chairul, "Do you think it's good opportunity?" Instead of answering, Sukanal suggested they meet for lunch with an officer from Bank Indonesia
Over lunch Chairul told the officer about his background and how he'd expanded his business. On the way back to work he gave the officer a ride. "I think you can go ahead and send me a letter of due diligence," the officer told him. When he returned to his office, he called his friends at Export-Import Bank to find out what a due diligence letter was. "So I closed my eyes and took the bank," says Chairul. He paid $5 million in three installments, more than he had paid for any other business, and got the money by selling his shares in the factories to his parents.
For the next two years Chairul immersed himself in the bank, working 20-hours days to replace its management, modernize its computer system and boost its liquidity. After plowing all profits back into the bank, he was ready when the Asian crisis hit in 1997. while other banks had to be bailed out, Bank Karman, renamed Bank Mega, lined up new clients. Profits jumped eighteenfold, he claims, by 1998 to $12,6 million.
Looking for another challenge, Chairul set about securing a TV license. "I believe television can change the mind of the people and make the country better," he says. "It can also make big money for you." He started a network from scratch in 1998, investing in higher-quality programming including sketch comedies and political satires. Today his Trans TV is the nation's third-biggest TV network, with a 14% market share.
Chairul had few setbacks along the way, crediting good luck, good timing and God. But there was one quite public disappointment. In 2001 Chairul was invited to be the first civilian chairman of Indonesia's badminton governing body, the PBSI. (Badminton is one of the country's most popular sports). For decades only four-star generals and former governors held this high-profile position, and Chairul's appointment was meant to signal a new Indonesia, where opportunities were available to those without ties to the government or military. After three years, however, he resigned, taking the blame for poor management that led to Indonesia's failure in the semifinals of the Thomas Cup
It didn't tarnish his reputation. In fact, he has since formed partnerships with some of the nation's best-known businessmen, including Anthoni Salim, with whom he recently bought land. He is also developing a $100 million resort area, to include Southeast Asia's largest amusement park, with the family business of the nation's vice president, Jusuf Kalla.
Those deals are part of Chairul's recent two-year spending spree, which also included buying a controlling stake in TV station Trans 7 from newspaper magnate Jakob Oetama and securing franchises of Baskin-Robbins and Coffee Bean & Tea Leaf. He also bought a stake in publicly traded tourism operator Anta Tour.
While he still expects to open 50 more Bank Mega branches next year, bringing its total up to 250, he is keeping an eye on the business and watching for customers who might be in trouble. To keep liquidity strong, he is injecting any surplus cash back into the bank. Bank Mega's stock, listed on the Jakarta Stock Exchange in 2000, is trading around the same level as a year ago.
Chairul is convinced that both he and Indonesia will emerge from this crisis stronger. Last year he chaired a group of economists, business people and government officials who penned "Visi Indonesia 2030," a country by 2030. "Indonesia needs the vision," says Chairul, emphasizing the same optimism that he tries to impart to his employees." If we work hard together, we can become one of the five largest economies by 2030."
Ambitious? Maybe. But, he adds, there's opportunity in crisis.
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