Property development conglomerate Lippo Group has long been touting their USD$20 billion Meikarta mega-project as surpassing “anything this country has ever seen, epic in its scale and vision as a truly integrated city of the future”, but lately it has been mired in reports about stalled construction, slow sales and accusations of broken promises. A newly breaking corruption scandal could put the project’s future in serious jeopardy, at least based on the market’s early reaction.
Today, the Corruption Eradication Commission (KPK) announced that they arrested ten people yesterday, including officials and civil servants working for the Bekasi Regency Government as well as individual working for private parties, in relation to a property licensing case involving the Meikarta project.
“Yes (it is related to Meikarta construction permits). We suspect there are illicit transactions related to the property licensing process in Bekasi,” KPK Deputy Chairman Basaria Panjaitan confirmed to Kompas today.
According to Basaria, KPK investigators confiscated around IDR1 billion (US$65,000) in Singaporean dollars as evidence of the illicit transactions.
The KPK deputy chief said that all of those arrested were currently being questioned at KPK headquarters in Jakarta and that the results of their investigation would be announced through a press conference later today.
There has been no confirmation on whether any of those arrested by the KPK were Lippo Group employees and Lippo Group has yet to issue an official statement regarding the case.
Although the company’s exact culpability in the case is far from clear, that did not prevent its stock from taking a significant hit in trading, with PT Lippo Karawaci (LPKR) share dropping IDR8 (2.69%) to IDR290 this afternoon.
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