PT Lippo Karawaci Tbk: Indonesia seizes land and other property related to 1998 rescue operations

JAKARTA, Aug 27 (Reuters) – Indonesian authorities have seized 5.3 million square meters (530 hectares) of land and real estate in several cities as part of efforts to recover unpaid government loans granted to banks during the 1998 Asian financial crisis, the minister said.

The land was used as collateral by rescue services and included 251,992 square meters (25.2 hectares) in Tangerang, west of the capital Jakarta, formerly owned by PT Lippo Karawac, said Security Prime Minister Mahfud MD, who did not mention the other owners.

The Minister made his remarks at a briefing on the confiscated land, at which the authorities had put up a sign stating that it had been taken over by the state.

Mahfud said Lippo Karawaci and the now-defunct Lippo Bank have handed over the country to the Bank of Indonesia’s restructuring agency to reduce debt.

The land previously owned by Lippo had been under government control for 21 years and the real estate company had no debt to the state, Lippang Karawac’s director of corporate communications, Danang Kemayan Jati, told Reuters.

“We support the government’s efforts to restore state property,” he said in a text message.

Friday’s transfer was the first seizure, set up by President Joko Widodo earlier this year, to track a total of Rs 110.45 trillion ($ 7.66 billion) in outstanding debt owed to bank owners and debtors.

The debts were part of the billions of dollars in financial support the government gave to lenders during the 1998 crisis to keep them afloat as Southeast Asia’s largest economy collapsed amid riots that helped overthrow the powerful man, President Suharto.

Hutomo “Tommy” Mandala Putra, the youngest son of the late president, had also been called in for a $ 2.6 trillion debt related to emergency aid, Mahfud’s office said earlier this week. Tommy was not immediately reached for comment, and the media reported that his lawyer had attended

Minister of Finance Sri Mulyani Indrawati said at the same press conference that the working group will next try to seek foreign funds. ($ 1 = Rs 14,415.0000) (Reported by Gayatri Suroyo, Stanley Widianto, Bernadette Christina Munthe and Agustinus Beo Da Costa; Editor Martin Petty and Ed Davies)