Indonesia raids home of Lippo Group deputy chairman in bribery probe (updated)

Lippo China Resources

18/10/2018 09:09

(Updates shares, adds S&P ratings, houses sold)
    JAKARTA, Oct 18 (Reuters) - Indonesia's anti-graft agency
said on Thursday it had raided 10 locations, including the home
of Lippo Group Deputy Chairman James Riady, 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  0226.HK  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, hospitals, and universities.
    Febri Diansyah, a spokesman for the KPK, said in a text
message its investigators had seized financial documents and
computers during the raids.
    The raids targeted the home of Riady, a Lippo Group office
and the home and offices of top local government official Neneng
Hasanah Yasin, one of nine suspects arrested by the KPK 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 dropped since the investigation was
made public. The company's flagship real estate developer
company, Lippo Karawaci, fell 2.78 percent on Thursday, with its
dollar bonds near record lows while Lippo Cikarang shares were
down 18 percent this week  LPKR.JK   LPCK.JK .
    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, while S&P Global Ratings
noted it risked weakening the firm's already fragile liquidity.
    Meikarta had completed residential units and previously told
media it had secured 32,000 fixed buyers, some of whom moved in
in September.

 (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))