based Lippo Bank, which made headlines with its alleged ties to the Democratic fund-raising scandal last year, is expected to be sold to Commercial Bank of San Francisco this week for about $20 million.
Robert A. Fuller Jr., president and chief executive officer of $146 million-asset Commercial Bank, confirmed that talks are in the final stages but said the cash deal "could fall apart."
Founded as Bank of Trade in 1961, Lippo Bank is owned by James T. Riady, whose family controls Lippo Group, a conglomerate based in Jakarta, Indonesia.
Lippo Group is under congressional investigation for alleged illegal contributions to the Democratic National Committee during the 1992 and 1996 presidential campaigns. Bank executives were subpoenaed by a Senate investigative committee in April 1997.
Lippo Bank announced Oct. 23 that it was in merger talks with a California bank, but it did not disclose the buyer's name. Mr. Riady, who was overseas and could not be reached, said in the release that financial problems in Indonesia motivated him to seek a buyer.
A sale to Commercial Bank would end Mr. Riady's 14-year tenure as owner of $100 million-asset Lippo, which has offices in San Jose and Los Angeles.
The bank, which serves the Asian community, since April 1997 has been operating under a Federal Deposit Insurance Corp. cease-and-desist order requiring it to improve asset quality, boost capital, and improve management. Sources said Lippo has been on more solid footing since Mr. Riady injected $6 million of capital into the bank 18 months ago.
The deal would be the first for Commercial Bank since Mr. Fuller's investment group took it over in 1990.
The group repositioned the bank to seek trade finance and private banking opportunities in Asia, Eastern Europe, and Russia. Mr. Fuller said Lippo's customer base would offer another outlet for Commercial Bank to peddle trade finance and Small Business Administration loan products.
