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Indonesia transfixed by new bank scandal

Indonesia transfixed by new bank scandal

(Indonesia) - Stock market regulator Bapepam has launched an enquiry into allegations that the country's seventh largest bank - Bank Lippo - deliberately lowered its share price to enable the former owners to buy back the bank. Indonesian media reports have claimed that Bank Lippo management manipulated the company's share price last year to the point that the stock fell 50 percent in the space of a few months.

The bank is also alleged to have two separate earnings statements for the first nine months of 2002, one showing a profit of 99 billion rupiah (A$18 million), the other a loss of 127 trillion rupiah.

It is claimed that the share manipulation and the loss statement were designed to force a rights issue which would have enabled former owners, the Lippo Group, to regain control of the bank they lost when it was taken over by the Government during the 1998 financial crisis.

The Lippo Group is controlled by the Riady family.
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