Indonesia’s PT Bumi Starts Probe Following London Investigation

By webadmin on 09:39 pm Nov 09, 2012
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Indonesia’s PT Bumi Resources, the nation’s biggest producer of power-station coal, said a South Jakarta court has approved an independent investigation into its financial accounts dating back to 2010.

The investigation was prompted by the company’s audit committee “in view of the public notifications by a shareholder, Bumi Plc, and various reports, both in international and local media,” the Jakarta-based coal producer said on Friday in an e-mailed statement.

Reports are due to the Chief Justice of District Court of South Jakarta within 90 days of the appointment of an auditor, it said.

PT Bumi is part-owned by the Bakrie family and is at the center of a feud involving London-listed Bumi Plc, owner of 29 percent of the Indonesian mining company, and Bumi Plc co- founder Nathaniel Rothschild.

Bumi Plc, which has lost 70 percent in trading this year, in September started an urgent probe into “potential financial and other irregularities” at its Indonesian operations, PT Bumi and PT Berau Coal Energy Tbk.

The so-called forensic audit will focus on the accounts for the financial years of 2010 through 2012, PT Bumi said.

The Indonesian company referred to funds from unit PT Bumi Resources Minerals that are invested in United Overseas Bank Ltd. without giving further details of the probe.

An official at London-based Bumi Plc declined to comment.

The Indonesian investigation comes as Bumi Plc studies alternative proposals for its assets from two of the key parties who founded it in 2010, Rothschild and the Bakrie Group.

Rothschild, 41, has appointed Morgan Stanley to advise him and held talks with potential new investors as well as current holders of Bumi, a person familiar with the matter said last week.

An offer from the scion of a centuries-old banking dynasty would counter a $1.2 billion proposal from the Bakries for Bumi Plc’s stakes in two coal producers — its holding in PT Bumi and the 85 percent it has in PT Berau Coal Energy.

The Bakries made their offer last month to help resolve “irreconcilable differences” with Rothschild. The financier has described the Bakries’ offer as not being in the interests of investors.

Bumi dropped 2.5 percent to 266.9 pence at 1:10 p.m. in London. Bumi Resources was unchanged at Rp 650 on Friday in Jakarta and Berau Coal Energy was also unchanged at Rp 220.

Bumi Plc said Sept. 24 it was starting a probe into potential financial “irregularities” at its Indonesian investments. The probe is linked to a $637 million writedown of development funds and exploration assets in Bumi’s Dec. 31, 2011, year-end financial statement.

London-listed Bumi won’t make a recommendation on any possible transaction until the investigation is “appropriately advanced,” the company said Nov. 5.

Bloomberg