Indonesia Stock Exchange has demanded coal miners PT Bumi Resources and PT Berau Coal Energy explain their corporate performance to the public following alleged irregularities. Authorities in London, where parent company Bumi Plc is listed, are preparing tighter rules on good governance.
IDX director for surveillance and compliance Mr Uriep Budhi Prasetyo said that the bourse has asked BUMI and BRAU to hold public exposés presentations before investors and stakeholders to clarify issues surrounding Bumi Plc’s launch of an independent investigation to probe irregularities in so called development funds.
Mr Uriep said that “We sent the request [Thursday], asking them to hold public exposés by October 2 at the latest. We hope they will explain all outstanding issues.”
The bourse has asked both to explain several matters, such as the investigation and alleged irregularities, financial and operational performance, debts and mature debts and recent downgrade of long-term corporate ratings by two major rating agencies.
The public exposé requests came on the heels of the bourse’s previous letter demanding BUMI and BRAU clarify Bumi Plc’s investigation of alleged irregularities in development funds and assets, which were marked down to zero in the London-listed firm’s 2011 accounts report.
BUMI and BRAU have answered the letters, saying that they received no notice of the investigation. Bumi Plc. currently holds a 29.2% stake in BUMI and 85 percent in BRAU.
Amid the irregularities probe, the regulator in London the Financial Services Authority is planning to lay down new regulations, putting strong emphasis on good governance, Reuters reported. The FSA proposal, to be published next Tuesday, is expected to tighten rules on reverse takeovers or backdoor listings, the power of controlling shareholders, corporate governance and the independence of company boards.
The proposal is a response to concerns that sub-standards companies can join the FTSE 100 index the 100 companies listed on the London stock exchange with the highest market capitalization too easily.
Source - The Jakarta Post
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