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Indonesian authorities raid home of Lippo Group deputy chairman in bribery probe

Anti-graft agency hits total of 10 locations linked to conglomerate's US$21 billion Meikarta real estate project

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The raids targeted the home of Lippo deputy chairman James Riady (above), a Lippo Group office and the home and offices of local government official Neneng Hasanah Yasin, who was one of nine suspects arrested earlier this week.

Jakarta

INDONESIA'S anti-graft agency said on Thursday it had raided 10 locations, including the home of the deputy chairman of the Lippo Group, as part of a bribery investigation linked to the conglomerate's US$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.

Costing US$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.

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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 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.

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.

Investigators have confiscated 513 million rupiah (S$46,482) and S$90,000 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 per cent on Thursday, while Lippo Cikarang lost 2.26 per cent .

A representative of the Lippo Group met the leadership of the Indonesia Stock Exchange on Thursday to discuss Meikarta, the exchange said.

Meikarta's parent company is Mahkota Sentosa Utama, a 49.99 per cent-owned subsidiary of Lippo Cikarang, which is 54 per cent-owned by Lippo Karawaci.

Moody's said on Thursday that the alleged bribery incident would be credit negative for Lippo Karawaci. REUTERS