Lippo Bank
Encyclopedia
Lippo Bank was a bank from Indonesia until it merged with Bank CIMB Niaga in 2008.
's 9th largest bank in Indonesia by the number of the assets. It was established in 1948 and controlled by ethnic Chinese Mochtar Riady
together with the Lippo Group
. Indonesia sold the stake in Bank Lippo as part of asset disposals aimed at cutting the government's budget deficit and recouping the 450 trillion rupiah it spent to bail out banks after the 1997 Asian financial crisis. Swissasia Global bought 52.1 percent of Bank Lippo in February 2004 from the Indonesian Bank Restructuring Agency
for $142 million. The agency took control of Bank Lippo from its previous owners, the Riady family, after the government injected funds into the lender in 1999 to boost capital.
The family still holds a minority stake, partly through PT Lippo E-Net, which owned 5.6% of the lender. Despite their minority holding, the Riady's retained controlling rights.
On 26 August 2005, the bank's shareholders and Bank Indonesia approved the sales of the 52.05% controlling stake held by Swissasia Global to Santubong Investment B.V which was wholly owned by Khazanah Nasional Berhad
, the investment arm of the Malaysian federal government. The sales took effect on 30 September the same year.
Since Khazanah, had an indirect interest of 93 percent in Lippo Bank through Santubong Investment BV and Greatville Pte. Ltd., and also owns 64 percent of Bank CIMB Niaga through Bumiputra-Commerce Holdings
, Bank Niaga and Lippo Bank had to be merged to comply to the Indonesian central bank's "single presence policy". On 1 November 2008, Lippo Bank officially merged with Bank CIMB Niaga and are known as PT Bank CIMB Niaga Tbk the Indonesian subsidiary of CIMB
Group.
"Huang's colleagues at Lippo Bank . . . never understood his corporate duties and described him as a `mystery man,' " the report said.
History
Lippo Bank was IndonesiaIndonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
's 9th largest bank in Indonesia by the number of the assets. It was established in 1948 and controlled by ethnic Chinese Mochtar Riady
Mochtar Riady
Mochtar Riady is an ethnic Chinese financial magnate in Southeast Asia. He is the founder and CEO of Lippo Group. He is also the chairman of the Asian Bankers Association. Born on 12 May 1929, in Malang, East Java, Mochtar is known to have a cold hand at transforming the fortunes of financial...
together with the Lippo Group
Lippo Group
The Lippo Group is a major Indonesian conglomerate founded by Mochtar Riady. The Lippo Group began with Bank Lippo, later using this as a platform for regional property development projects. These projects, throughout Indonesia and China, are akin to Irvine, California's development...
. Indonesia sold the stake in Bank Lippo as part of asset disposals aimed at cutting the government's budget deficit and recouping the 450 trillion rupiah it spent to bail out banks after the 1997 Asian financial crisis. Swissasia Global bought 52.1 percent of Bank Lippo in February 2004 from the Indonesian Bank Restructuring Agency
Indonesian Bank Restructuring Agency
The Indonesian Bank Restructuring Agency ) is part of a series of strategic policies taken by the Indonesian government in response to the banking and economic crisis which befell the country following the onset of the Asian monetary crisis in mid 1997...
for $142 million. The agency took control of Bank Lippo from its previous owners, the Riady family, after the government injected funds into the lender in 1999 to boost capital.
The family still holds a minority stake, partly through PT Lippo E-Net, which owned 5.6% of the lender. Despite their minority holding, the Riady's retained controlling rights.
On 26 August 2005, the bank's shareholders and Bank Indonesia approved the sales of the 52.05% controlling stake held by Swissasia Global to Santubong Investment B.V which was wholly owned by Khazanah Nasional Berhad
Khazanah Nasional
Khazanah Nasional Berhad is the investment holding arm of the Government of Malaysia entrusted to hold and manage the commercial assets of the government and to undertake strategic investments. Khazanah was incorporated under the Companies Act 1965 on 3 September 1993 as a public limited company...
, the investment arm of the Malaysian federal government. The sales took effect on 30 September the same year.
Since Khazanah, had an indirect interest of 93 percent in Lippo Bank through Santubong Investment BV and Greatville Pte. Ltd., and also owns 64 percent of Bank CIMB Niaga through Bumiputra-Commerce Holdings
Bumiputra-Commerce Holdings
Bumiputra-Commerce Holdings Berhad is the listed vehicle for CIMB Group, Malaysia’s second largest financial services group. It has been listed on the Main Board of Bursa Malaysia, the nation’s stock exchange since 1987...
, Bank Niaga and Lippo Bank had to be merged to comply to the Indonesian central bank's "single presence policy". On 1 November 2008, Lippo Bank officially merged with Bank CIMB Niaga and are known as PT Bank CIMB Niaga Tbk the Indonesian subsidiary of CIMB
CIMB
CIMB Group CIMB Group is a regional universal bank operating in high growth economies in ASEAN. CIMB Group has the widest retail branch network across the region and is an indigenous ASEAN investment bank....
Group.
Implications
The bank's United States subsidiary was implicated in the scandal of improper contributions to the Clinton-Gore Campaign. According to a 1998 Senate Governmental Affairs Committee report, by 1992, while employed by Lippo Bank in California, John "Huang began to raise illegal foreign money for the DNC through Lippo-owned shell companies ... " This money, which wound up in Democratic coffers, was ultimately traced to the "greater China region.""Huang's colleagues at Lippo Bank . . . never understood his corporate duties and described him as a `mystery man,' " the report said.
External links
- CIMB Official Site
- Campaign
- Senate report: John Huang's Years at Lippo http://www.fas.org/irp/congress/1998_rpt/sgo-sir/1-13.htm
- Lippo's Man in the Back Room http://www.time.com/time/magazine/article/0,9171,986712,00.html