Logging kingpin linked to kidnapping, violent assault seeks legitimacy via IPO

mongabay.com
December 11, 2013



A businessman whose company kidnapped and violently assaulted environmentalists investigating illegal logging in a national park is set to earn millions of dollars from Thursday's initial public offering of Sawit Sumbermas Sarana, a palm oil company with holdings in Indonesian Borneo. Environmentalists are warning responsible investors to steer clear of the IPO.

Abdul Rasyid, the founder of Sawit Sumbermas Sarana (SSMS), became notorious in the late 1990's and early 2000's for illegal logging and timber smuggling by his company Tanjung Lingga, which operated in and around Tanjung Puting National Park.

The Environmental Investigation Agency (EIA) — the group that investigated Tanjung Lingga's activities — says that in 2000, "[Rasyid] was named by the Indonesian Government as one of the top 18 illegal logging bosses in the country."

"EIA first documented Rasyid’s illegal logging activities in 1999, tracking valuable logs stolen from Tanjung Puting National Park to sawmills owned by his Tanjung Lingga Group of companies," said EIA in a statement. "On a follow-up investigation in early 2000, an EIA staff member and her Indonesian colleague were abducted and assaulted at gunpoint by Tanjung Lingga staff."

The EIA staff member, Faith Doherty, had the fingers on her right hand broken, while Ambrosius ("Ruwi") Ruwindrijarto was beaten and bruised.


Illegal sawmill in Central Kalimantan


EIA says that Tanjung Lingga was later busted twice for illegal timber shipments.

Now Rasyid is looking to cash in on his new business: palm oil. Sawit Sumbermas Sarana is seeking to raise nearly $90 million through an IPO on the Indonesia Stock Exchange (IDX) in Jakarta. The money raised will be used to finance new plantations, acquire new land concessions, repay debt, and provide working capital.

“Rasyid has tried to airbrush out his past as a major illegal logging boss and is now seeking respectability to expand his palm oil business. He made his first fortune through massive timber theft and is seeking to grow his wealth through further destruction of Central Kalimantan’s dwindling forests.”

Sawit Sumbermas Sarana's IPO is controversial on several accounts, according to campaigners. The company is planning to covert large areas of forest and peatlands that serve as critical habitat for orangutans and also face competing land claims from local communities. A further complication for the company is nearly 90 percent of its palm oil is sold to companies that recently signed pledges not to source oil produced via deforestation, presenting a unique risk for investors, according to Newman.

“Given Rasyid’s past activities and the current threat posed by SSMS to vital orangutan habitat, when it comes to the imminent IPO it is clear case of ‘investor beware’.”













CITATION:
mongabay.com (December 11, 2013).

Logging kingpin linked to kidnapping, violent assault seeks legitimacy via IPO.

http://news.mongabay.com/2013/1211-ssms-ipo.html