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The Indonesia Stock Exchange said it would ask the Bakrie group’s PT Bumi Resources for a detailed explanation of a Chinese sovereign wealth fund’s $1.9 billion investment in the company.

The IDX had sent a letter to Bumi on Thursday, giving it a deadline of three working days to provide a written explanation of the deal. The deadline expired at 5 p.m. on Tuesday.

“We haven’t received any reply from them, but we still need their explanation and want to see a presentation,” said Eddy Sugito, the director of corporate appraisal at the exchange, also known as the IDX.

“Therefore, the bourse authorities will summon Bumi executives later this week.”

Last week, Bumi and CIC signed a deal in which CIC agreed to invest $1.9 billion in what were termed “debt-like instruments” offered by Bumi, the country’s largest coal miner.

CIC is wholly owned by the Chinese government and is one of the largest investment institutions in the world. China is hungry for coal to power its economy.

Eddy said the bourse wanted to know exactly what the “debt-like instruments” were.

In addition, he said, the bourse wanted to know what proportion would be used for debt refinancing and what for capital expenditure, in addition to the likely effects of the debt on the company’s financial health.

Bumi said $600 million of the $1.9 billion was repayable in four years, $600 million in five years and the remaining $700 million in six years.

The investment attracts a 12 percent annual cash coupon, with a total internal rate of return of 19 percent, the balance payable at the time of final maturities.

“The IDX wants Bumi to provide it with an explanation about the 19 percent internal rate of return,” Eddy said.

Dileep Srivastava, Bumi’s vice president of investor relations, said on Tuesday that the 12 percent coupon was the fixed interest component of the debt, which was normal in a debt transaction.

“The internal rate of return is the equity-like return on the investment, payable at each repayment of principal at end of years 4.5 and 6, giving a total of 19 percent per annum — that is the investment or ‘debt-like’ part,” Dileep said.

“The total internal rate of return is still far, far cheaper than the cost of issuing new equity, because Bumi shares are still badly undervalued.”

Dileep said the company was confident its shares would rise further after soaring from Rp 910 to Rp 3,250 between Jan. 1 and Tuesday. He also pointed out that Bumi’s shares rose from Rp 900 to Rp 6,000 between January and December 2007.

“This means we are protecting value for existing shareholders and the deal will not in any way dilute their holdings,” he added.