Things go Bumi

24 September 2012 By Kevin Allison

The mining-focused acquisition vehicle has tumbled in value amid alleged financial irregularities in its Indonesian assets. A lack of information makes the shares hard to touch right now. And whatever the final financial fallout, the affair rubs off badly on the London market.

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Bumi Plc, the London-listed coal miner, launched an urgent investigation into potential financial irregularities at its Indonesian operations, sending its shares down 25 percent on Sept. 24.
The company, co-founded by British-born financier Nat Rothschild and part-owned by Indonesia’s Bakrie family, said it had commissioned an independent investigation into allegations concerning its Indonesian subsidiaries, including 29-percent owned PT Bumi Resources, Asia’s biggest exporter of thermal coal.
The investigation into what Bumi called “potential financial and other irregularities” is expected to include a close look at some $300 million of funds used by subsidiaries and affiliated companies to develop new projects, and also at certain loans extended by PT Bumi, long a concern for investors.

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