Indonesia raids home of Lippo Group's deputy chairman in bribery probe

Lippo China Resources

18/10/2018 06:24

JAKARTA, Oct 18 (Reuters) - Indonesia's anti-graft agency
said on Thursday it had raided 10 locations, including the home
of the deputy chairman of the Lippo Group  0226.HK , as part of
a bribery investigation linked to the conglomerate's $21 billion
Meikarta real estate project.
   The raids come after the Corruption Eradication Commission,
known as KPK, arrested two Lippo Group consultants and an
employee accused of trying to pay off city officials to obtain
property permits for Meikarta.  L3N1WW37U .  
    Costing $21 billion and billed as the "Shenzhen of
Indonesia", after the booming Chinese city, Meikarta is Lippo's
largest project to date and is meant to be a centre for the
automotive and electronic industries. It will also include
five-star hotels, shopping malls and universities.
    Febri Diansyah, a spokesman for the KPK, said in a text
message on Thursday its investigators had seized financial
documents and computers during the raids.
    The raids targeted the home of Lippo Group Deputy Chairman
James Riady, a Lippo Group office and the home and offices of
local government official Neneng Hasanah Yasin, who was one of
nine suspects arrested by the KPK earlier this week. 
    Yasin, Riady and other representatives of the Lippo Group
did not respond immediately to requests for comment.
    The KPK said Lippo employees detained this week said they
had been acting on instructions from Lippo director Billy
Sindoro to bribe Yasin, who is the regent for West Java's Bekasi
area where the Meikarta project is located.
    Sindoro has also been arrested, as well as four other public
servants. Lawyers for Sindoro and Yasin have not responded to
requests for comment.
    Investigators have confiscated 513 million rupiah ($33,772)
and S$90,000 ($65,378) that they said had been intended as bribe
money and suspect other instances of corruption.
    Counsel for Meikarta has told Reuters there was no tolerance
for corruption at the company and pledged to cooperate with KPK
investigators.
    Lippo Group shares have plunged since the investigation was
made public and remain in the red. The company's flagship real
estate developer company, Lippo Karawaci, fell 4.17 percent on
Thursday, while Lippo Cikarang lost 2.26 percent  LPKR.JK 
 LPCK.JK .
    A representative of the Lippo Group would meet the
leadership of the Indonesia Stock Exchange later on Thursday to
discuss Meikarta, the exchange said.
    Meikarta's parent company is Mahkota Sentosa Utama, a 49.99
percent-owned subsidiary of Lippo Cikarang, which is 54
percent-owned by Lippo Karawaci.
    Moody's said on Thursday the alleged bribery incident would
be credit negative for Lippo Karawaci.

 (Reporting by Cindy Silviana
Additional reporting by Tabita Diela
Writing by Fanny Potkin
Editing by Ed Davies and Paul Tait)
 ((Ed.Davies@thomsonreuters.com; +61 2 9373 1805; Reuters
Messaging: ed.davies.thomsonreuters.com@reuters.net))