Indonesia’s anti-corruption agency has arrested nine people, including a top district government official and a company director, in a bribery investigation linked to the Lippo Group’s $21 billion Meikarta real estate project near Jakarta. The Corruption Eradication Commission (KPK) arrested two Lippo Group consultants and an employee accused of trying to pay off city officials to obtain property permits for Meikarta, KPK chairman Laode Muhammad Syarif told a news conference late on October 15th. Costing $21 billion and billed as the “Shenzhen of Indonesia”, Meikarta is Lippo’s largest project to date and is meant to be a centre for the automotive and electronic industries, including five-star hotels, shopping malls and universities. The bribery probe has prompted investors to ask if more companies might get caught in the government’s anti-corruption campaign - adding to broader strains on the nation’s junk bonds, which have already been hit harder than Asian peers in the recent emerging-market sell-off as the rupiah tanks. “There could be broader implications as it brings the question over corporate governance into focus again,” said Charles Macgregor, head of emerging markets at Lucror Analytics Pte in Singapore. “Indonesian companies rate poorly on this scale. The government’s push to crack down on corruption may unearth other cases.”

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