Prabowo’s clampdown on Indonesian tycoons fuels capital flight
Bloomberg News
Jul 10, 2026
3 days ago
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For roughly six decades, Indonesia’s political leaders and business elites enjoyed a near-symbiotic relationship, one that survived a transition from dictatorship to democracy. That’s now collapsing under President Prabowo Subianto, spurring a race among tycoons to move cash out of the Southeast Asian archipelago.
Driven by concern over growing inequality and a belief in a more assertive role for the state in managing the economy, the former special forces commander is targeting the country’s leading industrialists who built immense fortunes off the nation’s booming resources sector. Disparaging them in public remarks as greedy “thieves” and “robber barons,” Prabowo has wielded mostly sticks and a few carrots to get more of their cash into state coffers.
Yet despite grievances that have won support in some circles, Prabowo’s policies are backfiring among investors: The rupiah is near record lows against the dollar, Indonesia’s stocks are the world’s worst performers and bond yields are surging. Global investors have offloaded $4.3 billion of equities this year so far on a net basis, four times the whole of 2025, according to data tracked by Bloomberg.
Tycoons are losing patience with Prabowo’s rhetoric and his increasingly tough tactics to extract their money, according to more than a dozen people familiar with Indonesia’s wealthy elites, who requested anonymity to speak freely. While some see the president’s moves as well-intentioned but poorly executed, many high-net-worth individuals are moving hundreds of millions of dollars offshore out of fear that Prabowo may turn to more forceful measures.
One of Indonesia’s richest tycoons sold $300 million of stocks and bonds in April and transferred the proceeds to Singapore, the people familiar said. Another wealthy clan moved at least $1 billion of their money overseas, splitting it between accounts in Switzerland, Hong Kong and Singapore, other people said.
“Prabowo wants to recover as much wealth as possible from the tycoons who have benefited from the country,” said Derwin Pereira, the Singapore-based chief executive of strategic advisory business firm Pereira International, who predicts his actions will continue for as long as he’s president. “If businesses aren’t confident the wealth they create will be protected from arbitrary actions, then they’ll hesitate to invest and expand.”
Other world leaders have periodically squeezed the mega-rich, including Russia’s Vladimir Putin, Chinese leader Xi Jinping and Saudi Arabian Crown Prince Mohammed bin Salman, who famously ordered some top billionaires and princes to be held at the Ritz-Carlton hotel for months back in 2017. Unlike them, however, Prabowo presides over a democracy highly exposed to global markets with freer flows of capital and protections for investors.
Indonesia’s free-floating currency and reliance on external financing to fund its budget deficit increase the economic stakes for any policy moves that either prompt tycoons to withdraw funds or deter foreign investors from buying its stocks or bonds. Moody’s Ratings and Fitch Ratings Inc. this year revised their credit outlooks for Indonesia to negative due to increasing fiscal strain, putting at risk the investment-grade rating the nation has enjoyed for more than a decade.
In the 20 months since Prabowo took office, he has tested the limits of what’s possible under the law. Indonesia’s government has seized large swathes of land that it says were used illegally, launched tax probes into several high-net-worth individuals and pressured the moneyed class to cough up close to $4 billion for low-interest “patriot bonds” issued by Danantara, a newly created sovereign wealth fund that’s now playing a key role in managing the economy.
Prabowo’s government is also weighing the nation’s first wealth tax, and parliament is discussing a forfeiture bill that would enable the seizure of assets from individuals suspected of corruption — in some cases without criminal convictions.
To date, the moves don’t seem to have hurt Prabowo’s standing with the masses in what is the world’s fourth-most populous nation. Only a small percentage of Indonesia’s roughly 280 million citizens own stocks. Still, riots in Jakarta and across the nation last year show that anger over inequality can also easily turn onto Prabowo himself if the economy slows or prices surge.
A study released in April by the Center of Economic and Law Studies, a local think tank, found that Indonesia’s 50 wealthiest people had a median net worth of $3 billion, compared with just $4,845 for the general population. Those mega-fortunes are now starting to wane under Prabowo.
Since January, the combined net worth of the country’s 10 richest families has plunged by $56.7 billion, according to the Bloomberg Billionaires Index. The top five tycoons — Prajogo Pangestu, Anthoni Salim, Budi Hartono, Low Tuck Kwong and Tahir, who like many Indonesians only goes by one name — control listed companies that make up around 20% of the stock exchange’s market value. Pangestu, who owns Indonesia’s largest petrochemical company, has lost the most: As of June 30, his wealth had declined by 66% this year to $15.6 billion.
For many tycoons, dealing with Prabowo has been a turbulent experience marked by mixed messages and conflicting signals.
Back in January at the World Economic Forum in Davos, the president said his government uncovered illegal practices “in all sectors of the economy.” He boasted that his administration confiscated four million hectares of plantations and mines in its first year — roughly the size of Switzerland — and revoked the licenses of 28 corporations for one million hectares of land after finding they violated laws.
“I don’t call this free enterprise or the free market,” he said. “I called it greednomics.”
Yet shortly afterward, he invited a group of five billionaires to his hillside residence on the outside of Jakarta. At the gathering, Prabowo urged the wealthy businessmen — Pangestu, Salim, property magnate Sugianto Kusuma, coal baron Garibaldi Thohir and Franky Widjaja, senior executive of the Sinar Mas conglomerate — to support his social agenda, according to people familiar with the matter.
Briefing them on Indonesia’s negotiations to lower US tariffs, the president said his main concern was employment and asked the tycoons to assist him in creating more jobs, the people said. Everyone present pledged to do that, and upon returning to Jakarta they issued memos to their companies about the need to boost employment. But soon after the president continued his attacks on the wealthy, the people said, leaving the tycoons feeling baffled and confused.
Then in another meeting with the same group of tycoons at the president's house in south Jakarta in the first week of May, he asked them to help shore up the weakening rupiah. Prabowo told them they could convert their US dollars, be it for personal or business use, to local currency, framing it more as a request than an order, the people familiar said.
But later that month, as the currency spiraled, Prabowo announced a shock plan to centralize commodity exports, a move that risks cutting into tycoons’ margins and pricing power. The whiplash continued several weeks later when his government made another play for their loyalty, saying it would exempt any purchases of Danantara-issued bonds from legal and tax scrutiny in a bid to draw funds back to the country.
A spokesperson for Prabowo’s office noted that the president’s relationship with the business community is “founded on a strategic partnership aimed at advancing the nation’s long-term development.”
“The president’s economic agenda remains firmly focused on fostering inclusive growth, creating quality employment opportunities, and ensuring the fair and consistent application of the rule of law,” the government communication agency spokesperson said. “President Prabowo has consistently encouraged the private sector to play an active role in strengthening Indonesia’s economic fundamentals through investment, job creation and sustainable economic development.”
Prabowo’s office added that with regard to “law enforcement measures involving land governance, export administration, anti-corruption efforts and practices such as under-invoicing, the government emphasizes that these actions are not directed at any particular individual or business group. Rather, they form part of a broader structural reform agenda to strengthen governance, enhance transparency and ensure a level playing field for all market participants, including domestic and international investors.”
Representatives for Thohir and Widjaja didn’t respond to requests for comment. Pangestu declined to comment.
In many ways, Prabowo has long been part of the system he now rails against. The close ties between Indonesia’s politicians and business executives date back to the era of Suharto, a dictator who governed the country with an iron fist for more than three decades from 1967 until his downfall in 1998. His relationship with ethnic Chinese tycoons, a minority in Indonesia who control many top companies, involved both sides giving each other favors.
“It was a mutual back-scratching,” said Nancy Chng, co-author of a book titled Liem Sioe Liong’s Salim Group: The Business Pillar of Suharto’s Indonesia, an account of one of Indonesia’s foremost tycoons.
During his presidency, the last to see 8% growth in Indonesia, Suharto regarded business owners as associates who could help boost the country’s economy. The practice continued after the nation embraced democracy, with subsequent leaders granting tax breaks and other perks to large companies. In recent years, for example, tycoons supported former leader Joko Widodo’s vision to create a new capital city in Borneo that is in limbo.
Prabowo himself grew up as a member of Indonesia’s elite, with his father serving in Suharto’s cabinet. Hailing from an educated and cosmopolitan family, Prabowo eventually joined the military and married Suharto’s daughter, although they separated soon after his 1998 ouster. Prabowo has officially declared more than $110 million in assets and his younger brother, Hashim Djojohadikusumo, helms a conglomerate whose interests span palm oil to coal mining and forestry.
Yet far from being a friend to tycoons, Prabowo views them with suspicion and contempt. In his book Indonesia Paradox published in 2022, he described how company executives have enriched themselves at home while parking their money overseas, and called for an improved welfare system to help poorer Indonesians.
“This greedy oligarchy wants to control all of Indonesia’s economic resources and is cruelly allowing the majority of Indonesians to live in poverty,” Prabowo wrote.
In early 2025, shortly after Prabowo took office, his government began taking control of plantations, mining sites and other resource-rich land that it said legally belonged to the state. Among the tycoons affected was Purwanti Lee, known locally as the “Sugar Queen” because of her family’s dominant position in that industry.
Authorities seized more than 80,000 hectares of her company’s land planted with sugar cane, an area slightly larger than New York City, while also raiding her home and barring her from leaving the country as they investigated allegations of money laundering. She hasn’t been charged with any wrongdoing.
Representatives for Lee didn’t respond to a request for comment.
In October last year, a coastal real estate development in northern Jakarta spearheaded by Kusuma was taken off a list of the government’s national strategic projects. That followed a Supreme Court ruling that decreed parts of the development sit on protected forest land and violated spatial planning rules.
The project was a joint venture between Kusuma and Salim Group, a conglomerate helmed by fellow billionaire Salim. It was granted the special status by Prabowo’s predecessor as part of efforts to boost tourism.
Representatives for Kusama and Salim didn’t respond to requests for comment.
Then in November, Victor Hartono, the scion of one of the country’s richest families, was detained briefly at Jakarta’s airport by immigration officials as he returned home from a family holiday in Japan. Officials barred the 54-year-old president of conglomerate Djarum Group, which is involved in everything from cigarettes to financial services, from leaving the country for six months due to what they said was a tax-related corruption probe.
The news quickly reached his father, octogenarian billionaire Budi Hartono, and triggered panic among family members, according to people familiar with the matter. Victor Hartono’s travel ban was lifted in a matter of days, with authorities citing his cooperation. Budi and his older brother, the late Michael Bambang Hartono, still jointly control the family fortune.
Victor Hartono declined to comment.
People close to the president say the moves against the tycoons are part of his push to curb corruption and make elites who grew rich from the country’s natural resources contribute more to nation-building.
Even so, bankers, lawyers and wealth advisers told Bloomberg the nation’s wealthiest people are increasingly moving money offshore by investing in gold, cryptocurrency and real estate. Many Indonesian moneyed clans have family members living in Singapore and the US who have become citizens of those countries, making it easier for them to buy and own landed properties while incurring minimal taxes. Other common destinations for their funds include Dubai, Hong Kong and Liechtenstein.
Tax strategies to ringfence family wealth are also gaining traction. UBS Group AG estimates Indonesia’s billionaires could pass down some $114.6 billion in wealth to the next generation over the next 15 years, the second-most for any country in South and Southeast Asia after India.
In Indonesia, individuals can transfer ownership of property or other valuable assets to their children or immediate family members via what’s known as hibah — an Islamic gift — that may be exempt from income tax if the transaction meets certain criteria.
Some tycoons are looking to put money or company shares into trusts, which Indonesian law doesn’t recognize in the same way as common law jurisdictions like Singapore and the UK. While Indonesian tax authorities can access ownership details of assets placed in a Singapore holding company, the paper trail goes cold if that asset is owned by a trust, according to Justin Halim, a Jakarta-based lawyer with Swandy Halim & Partners.
“The fact Indonesian law doesn’t explicitly recognize trusts is an added advantage because it further complicates authorities’ efforts to trace, identify and execute Indonesian assets held by trust structures,” Halim said. “This allows wealthy Indonesians to obtain enhanced wealth preservation and asset protection.”
Some tycoons move their money overseas in smaller batches by opening multiple investment accounts in local branches of foreign-affiliated banks. After a few weeks or months, they shift the money to overseas accounts held by the same banks, people familiar said.
Although money transfers of $10,000 a month or more now have to be backed by underlying transactions — a tenth of what was allowed before April — bankers to the ultra wealthy only need to provide justification for large transfers such as investments abroad, and central bank officials rarely scrutinize those, the people familiar said.
It’s a similar case when tycoons sell large amounts of shares in their listed companies, transactions that generally don’t raise red flags among regulators unless the amount is big enough for them to risk losing a controlling stake. After transferring the shares to an overseas account, the tycoons can use them as collateral for credit lines, for example, the people said.
Another loophole is around working capital. A parent company remits working capital overseas in the form of loans to subsidiaries located in other countries, which aren’t subject to any cap so long as the reasons for the transfer are justifiable. After the loan has been made, tycoons can direct their bankers to withdraw the money and manage it elsewhere, the people familiar said.
Some tycoons acknowledge there are bad apples within their fraternity who are involved in corruption and under-invoicing, and understand why Prabowo is moving to end such practices. Others are grateful the pressure isn’t as extreme as in places like Saudi Arabia or China: Danantara’s so-called patriot bonds, which Prabowo views as a test of loyalty among tycoons, still at least pay a 2% coupon.
The government is penalizing certain business actors “to consolidate a more aligned coalition of capital,” said Faris Al-Fadhat, a professor of international political economy at Muhammadiyah University of Yogyakarta who writes frequently about Indonesia’s conglomerates. “What we’re seeing under Prabowo is not an attempt to dismantle oligarchy, but to reorder it.”
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