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IDX to meet Bumi over result of audit appraisal
The regulator has not yet published its report on PT Bumi Resources’ recent takeover deals, despite having access to a key independent audit result, chosing instead to first consult with the giant coal company
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The regulator has not yet published its report on PT Bumi Resources’ recent takeover deals, despite having access to a key independent audit result, chosing instead to first consult with the giant coal company.
After more than two months work, the Indonesian Auditor Profession Society (MAPPI) completed its audit on whether the Bumi acquisitions were appropriate and submitted its assessment to the Indonesia Stock Exchange (IDX) authority and Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) earlier in the week.
But Bapepam and MAPPI however have remained tight lipped about the result of the audit on the acquisitions by Bumi, the most prized unit of PT Bakrie and Brothers which is controlled by the powerful family of Minister of People’s Welfare Aburizal Bakrie, and should announce it findings next week after first holding consultations with Bumi.
“We have submitted the report to Bapepam and BEI on Wednesday, but it is not in our authority to inform the outcome to the public,” MAPPI chairman Hamid Yusuf said Thursday.
BEI director for listing Eddy Sugito said on Thursday that his office was still studying the draft and would discuss it together with Bumi before endorsing it to Bapepam.
“We want to discuss it first so that there will be no disagreements between parties or objections from Bumi,” Eddy said.
He did not say why such consultation were necessary, especially with the same company that is the object of its investigation.
“During this back-door discussion, anything could happen. This would only give rise to suggestions that the regulators only serve the interests of majority shareholders. but leave that of retail investors behind,” stock analyst Yanuar Rizky said.
“Whether it is good or bad, leave it up to the market,” he said, adding that publication would minimize the risks of speculation in the market.
A softer explanation was given by analyst Pardomuan Sihombing, who said that the delay was likely because the stock market authorities were being careful because any result on the Bumi matter could have an impact on overall trading, due to its dominance in the market.
Bumi shares have risen 45 percent since December last year.
Fuad A. Rahmany, Bapepam chairman, pledged the announcement of the results would be delayed no longer than next week.
The probe centered on suspicions that Bumi’s acquisition deals last year were too expensive, although deals involving affiliates were supposed to require approval from a shareholders’ meeting.
Bumi acquired three local coal companies Dharma Henwa, Fajar Bumi Sakti and Pendopo Energy — for a total of Rp 6.18 trillion (US$611.8 million) late last year, in what some analysts considered to be potentially too expensive, especially between linked or affiliated firms.
Pendopo is allegedly controlled by PT Bakrie Capital Indonesia while the Fajar Bumi president director is a former analyst at Bumi and its coal-producing subsidiaries, according to a coal inventory document used in the industry.
The regulator is also seeing whether the deals were categorized as what are called ‘material transactions’, classified as transactions valued at more than 10 percent of a company’s revenue or 20 percent of its equity, thus requiring approval from a shareholders’ meeting.
Bumi has always denied any wrongdoing, saying that the deals were fair and had been declared appropriate by an independent auditor, Yanuar Bey and partners.
