Trump's Indonesian partner says has not signed China loan deal

JAKARTA (Reuters) - Indonesian business tycoon Hary Tanoesoedibjo confirmed on Wednesday his company had chosen a subsidiary of a Chinese state-owned construction firm to build a theme park at a luxury resort in West Java, but said he had not signed any loan deal with China for the project.

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South China Morning Post had reported Tanoesoedibjo’s company, MNC Group, had received $500 million of funding from the Chinese government and banks for the theme park, which will be situated next door to planned properties and a golf course developed by the Trump Organization.

The report drew controversy, given the current strains between Washington and Beijing.

Asked whether his company had received $500 million of Chinese funding, Tanoesoedibjo said in a text message “not true” and stated that MNC had only appointed Chinese Metallurgical Corporation of China (MCC) as a contractor.

In a separate text message, M. Budi Rustanto, vice president director at subsidiary PT MNC Land, said the company had appointed MCC as a contractor and denied any loan deal.

MNC Land, the unit responsible for developing the 3,000 hectare project in West Java, signed a framework construction agreement with MCC in June 2016 to build a theme park.

The Trump Organization in 2015 struck a deal to manage a luxury resort complex and villas, as well as a golf course at the site. The project also includes other hotels, residential areas and retail centers, as well as a national park.

Tanoesoedibjo has previously said his company planned to invest $500 million in the theme park alone.

MCC did not respond to calls seeking comments on Wednesday.

On May 10, MCC said in a statement on its website, which has since been deleted, that its subsidiary had three days earlier signed a deal to join the theme park project.

Trump Organization has also signed an agreement with MNC Land to manage a 110-hectare resort in Bali.

As a business partner of Trump, Tanoesoedibjo has previously said that believed his relationship with the U.S. President could help ties between nations.

Tanoesoedibjo previously stood as a candidate to be Indonesia’s vice president in the 2014 election and subsequently founded his own political party, which will contest Indonesia’s general elections in 2019.

Additional reporting by Shanghai Newsroom and Brenda Goh; Writing by Fransiska Nangoy; Editing by Ed Davies and Alexandra Hudson