The Bumi saga took another twist today as the coal miner set up by financier Nat Rothschild broadened an internal review into its key Berau subsidiary – forcing the suspension of its shares.
The FTSE 250 Indonesia-focused company said it would miss the deadline to publish its full-year profits after deciding last week to upgrade its review of Berau’s books into a “forensic audit” involving every dealing with all 130 of its contractors. Under the UK’s Disclosure and Transparency rules missing the deadline at the end of this month requires Bumi to suspend its shares until the audit is complete.
Bumi chief executive Nick von Schirnding said: “It’s painful, I’m sorry and cross at having to suspend our shares but if we end up with a clean balance sheet we will have achieved a lot. At the moment, I can’t say that.”
Ten days ago Bumi announced a review of Berau’s books after being unable to fully verify $38 million (£25 million) in land compensation payments at the unit, which owns three thermal coal mines on the Kalimantan island in Indonesia. But as the review progressed, its auditor PwC recommended a probe into all Berau’s business dealings.
Von Schirnding insisted that he did not expect the forensic audit to find any evidence of wrongdoing but said it was the right thing to do, especially given the recent overhaul of senior management at Berau.
“The old management has been removed and a new management in place. We therefore need to verify all agreements,” he said.
Bumi was set up in November 2010 when Indonesia’s wealthy Bakrie brothers reversed two of their businesses – an 85% stake in Berau and 29% of Bumi Resources – into Rothschild’s cash shell.
The co-founders quickly fell out and Rothschild, pictured, today renewed his call for the resignation of Bumi board directors connected to Berau. “It is simply not credible to suggest they are somehow victims of this ‘train wreck’ ….they are hopelessly and blatantly conflicted”.