From: Tim McCaughan/CNN
In: Washington
Posted 7-18-97

Subject: Lippo Chairman, China Resources Group React Unhappily To Senate Hearings

The money trail hearings have not gone unnoticed by those involved overseas.

The Lippo Group's deputy chairman, James Riady, gave a rare interview (the first since the fund-raising controversy erupted) in Jakarta, Indonesia to say that statements made about his company's relationship with China Resources, known to be a commercial arm of the Chinese government, were not political but "pure business," according to an AP/Dow Jones News Service report.

China Resources Group has reacted as well by taking out half-page advertisments in Hong Kong papers to dismiss the charges of a political connection between the two companies. However, neither group denies a business arrangement -- China Resources and Lippo are involved with various commercial partnerships.

In testimony before the Senate Governmental Affairs Committee earlier this week a business analyst said that China Resources is known to conduct intelligence gathering for the Chinese government.

In his interview, Riady said that Lippo wants "to synergize with China Resources ... to create a larger, stronger group."

The China Resources ads say the company has retained counsel in the United States to defend its reputation.

The Riady interview was conducted by Jay Solomon a reporter for the AP/Dow Jones News Service. Solomon's story appeared inside the July 17 Wall Street Journal.