The Indonesia Stock Exchange (IDX) said on Monday that it had asked for explanations from coal miners PT Bumi Resources (BUMI) and PT Berau Coal Energy (BRAU) over an investigation by their parent company of alleged misuse of so-called development funds.

IDX director of surveillance and compliance Uriep Budhi Prasetyo said that the bourse sent a letter demanding an explanation from BUMI and BRAU on Monday evening, soon after the announcement of the investigation plan.

“We want explanations about what Bumi Plc. has stated are irregularities. We seek data from BUMI and BRAU,” Uriep said on Tuesday.

Bumi Plc. is the parent company of BUMI and BRAU with ownership of 29.2 percent and 85 percent respectively. Bumi Plc. announced on Monday that it had commissioned an independent investigation to probe allegations of irregularities related to development funds in BUMI and BRAU.

Following the launch of Bumi Plc.’s investigation, one of its directors, Ari Saptari Hudaya, tendered his resignation as a non-executive director in the London-listed company on Monday.

Ari was Bumi Plc.’s chief executive officer until March, when the company saw board changes following the dispute between majority shareholder Bakrie Group and cofounder Nathaniel Rothschild.

Ari is currently serving as the president director of BUMI. The company said in a statement that he would focus exclusively on value-building at BUMI.

No clear details have emerged about the alleged irregularities except what the company described as the marking down of development funds to zero in Bumi Plc.’s accounts on Dec. 31.

A source quoted by Bloomberg said that the value of the funds and assets was slashed after auditor PricewaterhouseCoopers LLP could not verify the underlying assets.

A London-based law firm had been appointed to handle the independent investigation, which would take place in the next few weeks, the source said.

According to Bumi Plc.’s 2011 financial report, as much as US$75 million in business development assets at BRAU and $247 million at BUMI were allocated zero value.

The Financial Times reported that the development funds included BUMI’s investments in oil exploration in Yemen. BUMI, through its subsidiary Gallo Oil (Jersey) Ltd., operates two oil and gas concessions in Yemen. According to information on BUMI’s website, Gallo Oil plans to drill another exploration well this year, following six previous drillings.

BUMI director Dileep Srivastava played down the issue of the write-downs as the company had reported them to shareholders and regulators. “Everything was acknowledged and approved at shareholders meetings,” Srivastava said in a text message.

Despite the ongoing uncertainties, shares in Bumi Plc. and BUMI traded higher on Tuesday.

Bumi Plc. stood at 169 pence on Tuesday, a 14.5 percent rise compared to Monday’s closing price, when the stock fell by almost a quarter. Bumi Plc. has fallen by around 80 percent year-to-date.

Meanwhile, shares in BUMI closed at Rp 690 (7 US cents), up 1.47 percent compared to a day earlier. BUMI has dropped 68.64 percent year-to-date.

Analysts said that the rising share prices were only temporary as the companies, particularly BUMI had a critical problem; mounting debts.

“The increase is only a short stabilization. The situation is getting complicated, BUMI’s DER [debt
to equity ratio] is already too high,” Edwin Sebayang of MNC Securities said.

Shares in BRAU fell, to Rp 180 on Tuesday or 3.22 percent lower than Monday’s closing price.

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