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Commercial Bank Buys Lippo Bank for $15.9 Million in Cash

November 10, 1998|From Times Wire Services

James Riady, the Indonesian billionaire whose family controls the Lippo Group of financial companies, sold the group's California bank to Commercial Bank of San Francisco for $15.9 million in cash, both banks said 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.

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.

Commerical Bank operates one office in San Francisco's financial district.

San Francisco-based Lippo Bank California said last month that Riady, who owns 99% of its shares, decided to sell it because he is 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 offices and staff are expected to be retained after the acquisition.

Shareholders of Lippo Bank will receive a cash payment of $15.9 million.

Riady and the Lippo Group were drawn into controversy earlier this year after media reports about 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.

The Riadys and Lippo denied the allegations.

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