Indonesian Bankruptcy Case Against Lippo Spooks Investors

Questions have emerged over whether one of Indonesia’s wealthiest families has in effect dragged itself into court to prevent a foreign creditor from recovering a loan — a case experts say threatens the credibility of the country’s bankruptcy laws, the Financial Times reported. The case against a subsidiary of Lippo group, which is controlled by Indonesia’s Riady family, comes at a time when defaults are rising in the country. It is expected to spark concerns over powerful local conglomerates forcing out foreign creditors through bankruptcy proceedings. That is because the two companies that have pulled the Lippo offshoot into court appear to have had links to its vast real estate empire. Since companies with prior links to Lippo have sued its own subsidiary, questions have arisen over whether it has been able to control many of the terms of the bankruptcy and push Austrian lender Raiffeisen Bank International from the process. Read more