Indonesia summons Lippo's James Riady to assist in bribery probe involving $21 bln project

Lippo China Resources

30/10/2018 10:38

JAKARTA, Oct 30 (Reuters) - Indonesia's anti-graft agency on
Tuesday summoned Lippo Group Deputy Chairman James Riady as a
witness in a bribery probe involving a $21 billion construction
project, as it cracks down on widespread bribery in Southeast
Asia's biggest economy.
    The summons of one of the country's most powerful executives
follows the arrests this month of nine people in connection with
the investigation.
    The probe comes as President Joko Widodo's record on graft 
comes under increased scrutiny ahead of his bid for re-election
in April, after a term in office during which vested interests
have continued to hold sway in many areas of Indonesia despite
some high-profile graft cases.
    The most recent case saw arrests on Sunday in a separate
bribery investigation involving a senior executive of palm oil
firm PT Sinar Mas Agro Resources and Technology Tbk  SMAR.JK .
 urn:newsml:reuters.com:*:nL3N1X8074
    At Lippo, construction is underway for its largest-ever
project dubbed Meikarta, featuring campuses for the automotive
and electronics industries, as well as hotels, shopping malls,
universities and housing. It has billed the development as the
"Shenzhen of Indonesia", after China's booming manufacturing
city.
    But the future of the project became uncertain this month
after the Corruption Eradication Commission, known as KPK,
arrested nine people including a Lippo director, two consultants
and government officials as part of a bribery probe linked to
Meikarta.  urn:newsml:reuters.com:*:nL3N1WW37U
    It also confiscated what it said was $100,000 in bribe money
during a sting operation, and raided dozens of locations
including Lippo offices and Riady's home.  urn:newsml:reuters.com:*:nL3N1WY1SQ
    The case has played havoc with Lippo Group stock, with PT
Lippo Cikarang Tbk  LPCK.JK  hitting a seven-year low this month
and PT Lippo Karawaci Tbk  LPKR.JK  falling to its lowest since
mid-2004.
    KPK told Reuters it was summoning Riady as a witness for
suspects it believes were involved in the bribing of public
officials to obtain property permits for Meikarta.
    Television footage showed Riady entering the KPK building on
Tuesday, dressed in a suit without a tie. He did not respond to
questions from reporters. Representatives of Riady and the Lippo
Group could not be reached for comment.
    KPK spokesman Febri Diansyah said in a text message the
agency was investigating whether the alleged bribery involved
any "company-wide actions," and was also looking into the local
government's permit process for the Meikarta project.
    Meikarta is located on the outskirts of the capital Jakarta,
near the Jakarta-Bandung high-speed train project. The 22 square
kilometre project is aimed at leveraging Chinese investment
under Beijing's Belt and Road trade relations initiative, as
well as boosting partnerships with Chinese firms, analysts said.
    A lawyer working on Meikarta said previously there was no
tolerance for corruption and pledged to collaborate with KPK
investigators. The lawyer also said there would be an internal
probe.
    "In the event we find that there was deviation from our
anti-corruption principles, we will not hesitate to strictly
sanction anyone found guilty according to employment law,"
counsel Denny Indrayana said in a statement last week.
    China State Construction Engineering Corp (CSEC)  601668.SS 
is among companies involved in Meikarta, in what it called one
of its biggest overseas projects. The firm did not respond to a
Reuters request for comment on the ongoing probe.

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Indonesia arrests executives of palm firms in bribery probe   
 urn:newsml:reuters.com:*:nL3N1X8074
Indonesia arrests 9 in bribery probe linked to $21 bln Lippo
Group project     urn:newsml:reuters.com:*:nL3N1WW37U
Indonesia raids home of Lippo Group's deputy chairman in bribery
probe      urn:newsml:reuters.com:*:nL3N1WY1SQ
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Agustinus Da Costa and Fanny Potkin; Editing by
Ed Davies and Christopher Cushing)
 ((f.potkin@thomsonreuters.com;))