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, 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..
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 .
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)