Fri, Sep 28, 2012 - Page 15 News List

Indonesia’s Bumi Resources hopes to resolve allegations

IRREGULAR BEHAVIOR:Bumi Resources’ parent company, Bumi PLC, has ordered an urgent probe into irregularities in the company’s operations


Indonesia’s largest coal producer, Bumi Resources, said yesterday it is “acting to resolve” allegations of irregularities at its operations after its parent launched an investigation.

London-listed Bumi PLC, owned by financier Nathaniel Rothschild, said in a statement on Monday that it had ordered a probe into “certain allegations on an urgent basis, and to report to its board,” according to a statement on Bumi Resources’ Web site.

However, Bumi Resources, which is owned by the country’s powerful Bakrie family, said in its first official response to the announcement: “We received no advance notice of either the investigation or the press release.”

The firm is in contact with the Indonesian stock exchange and the capital market regulator, Bapepam-LK, and “will be complying with all of our obligations under Indonesian law,” it said in the statement.

“The management of PT Bumi Resources will be acting to resolve these matters as expeditiously as possible, for the benefit of all stakeholders, and will make further announcements as appropriate in due course,” the firm said.

The company did not specify what kind of allegations were being investigated by Bumi PLC, which has a 29 percent stake in the Indonesian unit.

Rothschild last year released a letter demanding a “radical cleaning up” at Bumi PLC.

Rating agency Moody’s on Tuesday revised Bumi Resources’ outlook to negative from stable while Standard & Poor’s on Wednesday downgraded Berau Energy, owned by Bumi Resources, and lowered its outlook to negative. S&P cited “potential negative effect” of the current investigation. Shares in Bumi Resources and Bumi PLC have tumbled more than 20 percent since Monday’s announcement, according to Dow Jones Newswires.

Bumi Resources is one of many companies owned by the family of Aburizal Bakrie, one of Indonesia’s wealthiest men and probable candidate for presidential elections in 2014.

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