Trapped in debt, the enterprise of RI’s richest man goes out of enterprise

Jakarta, CNBC Indonesia – Debt administration should be sensible. If not, even wealthy folks can fall into poverty due to it. What occurred to Kwik Djoen Eng, one of many richest folks in Indonesia throughout the colonial interval.

Kwik initially had a enterprise empire based mostly on Solo and unfold to Japan. Nonetheless, his giant enterprise was destroyed by mounting money owed.

Kwik Djoen Eng was a resident of Fujian, China, who did enterprise in Java in 1877. He and his brother based Kwik Hoo Tong Handelmaatschappij (KHT). This firm, which was established on 17 July 1894, trades agricultural merchandise, similar to sugar, tea, rice, coconut oil and charcoal.

Within the firm, Kwik is the principle particular person. Alexander Claver in Dutch Commerce and Chinese language Retailers in Java (2014) stated that the person born in 1860 was in a position to talk making it straightforward for a lot of banks to belief him.

He managed to persuade the Central Financial institution of the Dutch East Indies, de Javasche Financial institution (DJB), to offer a mortgage. As well as, he additionally succeeded in attracting Financial institution of Taiwan, Financial institution of Japan, and a financial institution from England, particularly Customary Chartered, as traders. Tons of of 1000’s got here out of the financial institution’s coffers.

All this makes the KHT enterprise much more profitable. Furthermore, when KHT targeted its enterprise on sugar merchandise. Leo Suryadinata in Southeast Asian Individuals of Chinese language Descent (2012) stated that within the palms of Kwik Djoen Eng KHT rose to turn into a serious firm that efficiently competed with the Kian Gwan sugar firm, owned by the sugar king Oei Tiong Ham.

KHT was additionally included within the 5 largest corporations on the planet in 1920. Its complete income reached 14 million guilders. The enterprise which was initially based mostly in Solo slowly started to unfold to China and Japan. The corporate additionally actively invests in lots of corporations and banks.

At this level, Kwik’s private wealth reached 50 million guilders, making him one of many few richest folks within the colonial period. He used the cash to construct magnificent palaces throughout a number of areas.

Nonetheless, enterprise capital that comes from debt is dangerous. Kwik is excellent at getting financial institution credit score. Nonetheless, this backfired when the debt he took on was too nice.

First, KHT may pay the debt in installments from enterprise income. Nonetheless, when there was a downturn in turnover, KHT was on the sting of a cliff. When income declined starting in 1925, debt funds turned concerned. 9 million guilders weren’t paid.

To get round all that, Kwik makes use of a gap digging system to cowl the holes. He utilized for an additional mortgage to repay the debt. All this left KHT largely in debt. All credit score banks have given the yellow mild.

Alexander Claver stated authorities threatened to intervene and file for chapter if no fee or compensation was provided.

In the long run, within the final week of January 1935, after 40 years of constructing a enterprise empire in Indonesia and the world, KHT’s historical past was declared full as a result of it couldn’t pay its money owed ​​​​​​​extra. All KHT and Kwik property have been absorbed by de Javasche Financial institution which is now Financial institution Indonesia.

Nonetheless, the give up couldn’t get better all of the money owed, which have been so giant. Whereas this arrest was going down, Kwik Djoen Eng died. He lived as a person stuffed with wealth, however died penniless. Traces of his life can nonetheless be discovered on the Djoen Eng Palace in Salatiga, Central Java.

(fsd/fsd)