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Companies

Lippo Karawaci cedes control of Meikarta developer

Transactions limit exposure to losses, helping to buoy profit

The Meikarta development in Cikarang, east of Jakarta, on Oct. 15.    © Reuters

JAKARTA -- Lippo Karawaci, the Indonesian property giant, has ceded majority ownership of the company developing its troubled $21 billion Meikarta project -- once dubbed Indonesia's Shenzhen, but which has become the focus of a major bribery investigation.

The transactions to change control will allow the group to separate losses incurred by the struggling project from its consolidated results. They have also resulted in a revaluation of its remaining stake that left Lippo Karawaci reporting significantly higher net profits for the first half of this year. Nevertheless, the group has reported a near doubling of cash outflow in the six-month period.

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