James sells California bank at $15.9m

James sells California bank at $15.9m

SAN FRANCISCO (Bloomberg): James Riady, the Indonesian businessman whose family controls the Lippo Group of financial companies, sold the group's California bank to Commercial Bank of San Francisco for US$15.9 million in cash, both banks said on Monday.

Lippo Bank California, a trade finance and real estate business with about $87 million in assets, will combine with Commercial Bank, which has about $167 million in assets, and the new company will be based in San Francisco, the banks said.

The transaction, expected to close early next year, will expand Commercial Bank's business in Asia, the banks said.

``It enhances our strong market position in trade finance activities, significantly expands our presence in the Asian community and adds locations to serve our clients throughout California,'' said Robert Fuller, chairman and chief executive of Commercial Bank.

San Francisco-based Lippo Bank California said last month that Riady, who owns 99 percent of its shares, decided to sell it because he's too busy working on his businesses in Asia to devote enough time to the U.S. bank.

Lippo employs about 65 people in offices in San Francisco, Los Angeles and San Jose. The bank was founded in 1961 as the Bank of Trade. Riady took control in 1985 and the name was changed to Lippo Bank California in the late 1980s.

The banks said Lippo's branch office and staff are expected to be retained after the acquisition.

Riady and the Lippo Group were drawn into controversy earlier this year after The Washington Post reported that a congressional report on political donations identified Riady and his father, Mochtar Riady, as among six people with strong ties to China who may have funneled money into 1996 U.S. political campaigns.

Lippo denied the allegations.