--PT Bumi Resources receives South Jakarta court approval to set
up audit team.
--The team will conclude audit within 90 days of the appointment
of auditor.
--Court approval paves way for PT Bumi and Bumi PLC cooperation,
person familiar with decision says
--Move comes after alleged financial irregularities in PT
Bumi.
(Updates with background.)
By Andreas Ismar and Eric Bellman
JAKARTA--Indonesia's biggest thermal coal producer, PT Bumi
Resources (BUMI.JK), has received a court approval to set up an
audit team, it said in a filing to Indonesian Stock Exchange
Friday, adding that the team is expected to conclude and send its
report to the court within 90 days after appointing the
auditor.
"The South Jakarta district court on November 8 has approved
request lodged by our audit committee" to conduct a thorough audit,
it said in the statement, adding that it made such request to the
court on Oct. 15. The company didn't say when it will appoint an
auditor.
The court ordered the company's "president director, board of
directors, and employees to provide all data and information
required for audit", in particular information related to financial
management, investment and other transactions between 2010 and the
first half of 2012, the company said, adding that it will also
audit its January-September financial reports, which will be
published by Dec. 31.
The move came after its major shareholder, London-listed Bumi
PLC (VLLRF, BUMI.LN), in September launched an investigation for
alleged financial irregularities involving more than $500 millions
in its Indonesian subsidiaries. Bumi PLC, which appointed U.K. law
firm Macfarlanes to carry out the probe, owns a stake of just over
29% in the Jakarta-listed Bumi Resources.
The Indonesian court decision was necessary to allow Bumi
Resources to cooperate with Bumi PLC's investigation, a person
familiar with Bumi Resources thinking said.
"With this initiative, the company reaffirm its commitment
towards law enforcement in Indonesia...We believe that these
proactive steps were taken in order to protect stakeholders
interests and also to fairly address" concerns raised by Bumi PLC,
Dileep Srivastava, corporate secretary of Bumi Resources, said in
the statement.
Indonesia's Bakrie Group, which helped create Bumi PLC last year
when it folded its mining assets into a shell company created by
financier Nat Rothschild, last month offered $1.2 billion to buy
back its assets and pull out of the venture after several public
spates with Mr. Rotschild.
The proposal put forth by Long Haul Holdings, a unit of the
Bakrie Group, involves three deals. First, PT Bakrie & Brothers
(BNBR.JK) and Long Haul will cancel their 23.8% stake in Bumi PLC
in exchange for the equivalent value in Bumi Resources, or a 10.3%
stake. Secondly, the Bakrie Group plans to buy Bumi PLC's remaining
18.9% stake in the Indonesian unit before the end of the year.
And thirdly, the Bakrie Group wants to buy Bumi PLC's other big
coal asset, PT Berau Coal Energy (BRAU.JK). Bumi PLC owns an 85%
stake in Berau, fifth largest coal mining company in Indonesia.
Should Bumi PLC's board approved the $1.2 billion proposal made
by Bakrie Group, it would leave the London company as a cash shell.
Nat Rotschild earlier this week had submitted an alternative
proposal to Bumi PLC, which details are still unclear. One thing is
certain, though: Bumi PLC said that it would only make
recommendations on incoming proposals once the investigation has
been completed.
Write to Andreas Ismar at andreasismar.sandiwan@dowjones.com and
Eric Bellman at Eric.Bellman@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires