Shares of Lippo Group companies would see some pressures also after reports that some of its key executives were arrested on bribery charges related to the construction of mega project Meikarta and First Media.
The arrest would raise further doubts of the viability of Meikarta, which has many doubters due to the sheer scale of its ambitions and how the group run their business. The arrest could also serve as a political fodder for the opposition camp as the Group is closely associated with President Joko Widodo.
Meikarta is Lippo Group’s property arm PT Lippo Cikarang Tbk (IDX: LPCK) has reached a deal with ten global institutions to utilize and develop 273,000 square meters of land in the satellite town with an investment value of US$550 million.
Global investors such as Columbia University Medical Center, University College London, University of North Carolina, Genesis Rehab Services, World Trade Center, HTC Corporation, China Telecom Global Limited, JM Eagle, Zhong Ying Finance, and Lausanne Hotel Management Institute involved on the project.
According to the CEO of Lippo Group, James Riady the cooperation focuses on the development of Meikarta centre of education, research, health and logistics. The giant Meikarta project, which is being marketed as the “Shenzhen of Indonesia”, is located about 34 kilometers to the east of Indonesia’s capital city of Jakarta, on the western part of Java island.
Meikarta is being marketed as a 500-hectare property development project, consisting of 100 hectares of open green space, 250,000 units of prime residential property, and 1,500,000 square meters of prime commercial space.
After the Group’s ex-Commissioner, Eddy Sindoro, sent himself to Indonesia’s Corruption Eradication Commission on Oct. 12, after two years escaping, yesterday his brother Billy Sindoro also arrested by the anti-graft body on Meikarta bribery’s issue.
CEC’s chairman Agus Rahardjo said on Oct. 4, that former president of Lippo Group had been recorded in the list of international fugitive or red notice by International Police (Interpol). Sindoro was assigned as suspect on Dec. 23rd, 2016, for alleged bribery case in Central Jakarta State Court.
The bribery was aimed to smooth Across Asia Ltd., against First Media case review submission process that has passed the deadine. Sindoro asked for Secretary of Supreme Court, Nurhadi’s help. Then, Nurhadi ordered Registrar Secretary of Central Jakarta State Court, Edy Nasution to receive the past due-case review submission.
Doddy Aryanto Sumpeno, Sundoro’s confidant, caught bribery Nasution for $50.000. Together with him, his lawyer Lucas, as the suspect for obstructing the investigation process. The body accused Lucas of backing Sindoro to go abroad even after being deported by the Malaysian government on August 29.
In Indonesia, the bribery practices by the government officials and member of parliament have been rampant for years and are the concern of President Joko Widodo. But the weak law enforcement by the authorities makes corruption practices continue in this country.
For Lippo and other big businessmen, this has become a separate warning that these practices must be eliminated so that the country is free from corruption. So far no further comment on the bribery case from the Group.