Fed issues consent order against Riady

Fed issues consent order against Riady

WASHINGTON (Dow Jones): The Federal Reserve issued a consent order Friday against BOT Corp. and Indonesian businessman James Riady for their role in the acquisition of Lippo Bank of Los Angeles.

The Fed said BOT and Riady violated the Bank Holding Company Act by purchasing more than a quarter of Lippo Bank's stock and exercising a controlling influence over the bank's management and policies.

Under the order, BOT, a Netherlands Antilles company, must divest at least 98 percent of its shares in Lippo, pay a $300,000 civil penalty and turn over any profit from the sale of the bank.

BOT and Riady, however, deny and dispute that BOT ever acquired shares in Lippo, or had the power to exercise influence over the bank. Still, BOT consented to the Fed's order without admitting to any allegations.

The connection of Riady, a member of the ethnic Chinese family that controls Indonesia's Lippo Group, to BOT was not clear in the Fed's order. A Fed spokesman said Riady "owns some shares of BOT"

James Per Lee, a spokesman for Lippo Bank, said Riady owns 99 percent Lippo Bank's shares. He said the bank has been for sale since last year and "is very close to being sold."

Riady has been linked with illegal foreign contributions to the U.S. Democratic Party. According to reports, former Commerce Department fundraiser and Lippo official John Huang collected more than $2 million in illegal donations for the party.