Bumi

Bumi, the Indonesian coal miner long plagued by allegations of accounting irregularities, on Friday reported an annual loss of $2.4bn after delaying the publication of its results.

The results, which were delayed following the suspension of the company’s shares, also revealed the company had discovered $200m of spending with “no clear business purpose”.

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Shares in Bumi soared over 12 per cent on Friday on a Reuters report that financier Nat Rothschild was establishing a consortium to launch a counter bid for the troubled mining company.

Such a move would pit Rothschild against the billionaire Indonesian Bakrie family, which set up Bumi in a partnership with Rothschild that has since collapsed in acrimony.

It would also add political spice to the financial arguments, as the people Rothschild has reportedly approached with his plan include Prabowo Subianto, an Indonesian presidential election candidate, whose rivals in the 2014 will include Aburizal Bakrie, the Bakrie family head. Read more

Indonesia should consider revamping its corporate governance standards in the wake of the Bumi affair.

Even though the case involves a dispute among private shareholders, the government must tread carefully because the affair is seen as “a bad precedent” for the country.

That’s the view of Chatib Basri, chairman of the government’s investment coordinating board, (pictured) who told beyondbrics of his concern about Bumi’s impact on the investment climate. Read more

In a dramatic turn to the Bumi PLC saga, Nat Rothschild, the British financier, has resigned from the FTSE 250 coal miner’s board while firing a public broadside at Samin Tan, chairman.

In a letter on Monday he accuses Tan of complicity in oppressing minority shareholders and says it would be a “disgrace” to go ahead with an offer from Indonesia’s powerful Bakrie family that would unwind Bumi’s London listing (see above link). “Based on news reports and other sources,” he writes, “it appears that you shall be reimbursed for your investment at a price of £10.91 a share, whilst other investors see an estimated return of just £4.30 a share. This is a clear breach of the spirit and, I believe, the letter of the takeover code.” Full text of the letter after the break. Read more

Catch up with the week on beyondbrics, with the ten most popular stories from the blog, a few things we’ve learnt, and a chart. This week: BumiRead more

Shares in Bumi closed 39.47 per cent up on Thursday as investors digested the offer by the Bakrie family to exit the London-listed company. At one stage shares were up over 55 per cent.

Read the beyondbrics and FT.com stories.

Shares in Bumi plc soared on Thursday on a surprise offer from the Bakrie family to split from the company, buy out its assets and return things, more or less, to where they were before they teamed up last year with British financier Nat Rothschild.

The 29 per cent leap to 240p means the shares have doubled since their all-time low of 119.5p last month, when the market was hit by claims of financial irregularities. But shareholders are still left staring at heavy losses: the shares peaked last year at £14 and spent most of 2011 above £10 (the initial deal price) before the Bakries and Rothschild fell out. Read more

By Steven Williams of CEB

The multi-million dollar discrepancy between asset valuations in London and Indonesia, which has wiped around 50 per cent off the value of the coal miner Bumi’s shares in the past week, is a stark demonstration of the dangers faced by companies expanding their global operations.

Bumi is not the only company which faces the risk of losses from compliance failures. In research we conducted with 125 of CEB‘s member companies around the world, we found 15 per cent of employees had observed some form of corporate misconduct but only a fifth of that information was reported to executives. Corporate centres are effectively flying blind on compliance – and the problem is particularly serious in emerging markets. Read more

For the smart investor what really matters in emerging markets is not putting the money in – it’s getting it out.

That’s the real test, as investors in Bumi Plc have learnt to their cost. The shares plunged 32 per cent on Monday after the London-listed group, part-owned by financier Nat Rothschild and Indonesia’s Bakrie family, launched an investigation into alleged financial irregularities at one of its Indonesian affiliates. Read more

The truce at Bumi, the London-listed Indonesian coal miner, seems to be holding.  As expected, the company on Tuesday announced Indonesian billionaire Samin Tan has taken over as chairman following last year’s boardroom row with British financier Nat Rothschild. Rothschild is giving up his position as co-chairman and becoming a rank-and-file director.

Tan declared that “the management changes” would strengthen the team. But shareholders will want to see the new arrangements work before trusting Bumi again. The shares rose 4 per cent in early trading – but are still down 42 per cent over the past year, including a 10 per cent drop last week. Read more