Bumi Plc (BUMI), the Indonesian coal producer trying to recover $201 million in missing funds, remains in talks with the U.K.’s Financial Conduct Authority to end a two-month suspension of its stock trading in London.
Bumi is seeking to resume trading “as soon as possible” after the June 26 annual general meeting of shareholders, the London-based company said today. Talks with the regulator have focused on work to “enhance its internal systems and controls” at one if its two Indonesian investments, PT Berau Coal Energy, Bumi said.
A review of Berau’s finances found $201 million of spending with “no clear business purpose,” Bumi said May 31 after delaying its full-year results by more than two months. Pensions & Investment Research Consultants Ltd., which advises institutional investors with combined assets of more than 1.5 trillion pounds ($2.3 trillion), this week said it had concerns that corporate governance at Bumi was inadequate and recommended shareholders vote against ChairmanSamin Tan.
Bumi has been at the center of a battle for control between co-founders Nathaniel Rothschild, scion of a centuries-old British banking dynasty, and Indonesia’s Bakrie family since the $3 billion deal that brought them together started to sour in late 2011. Bumi said today it is sticking to a plan to separate from the Bakries and will provide an update at next week’s AGM.
“The share suspension is a smoke-screen designed to divert investors’ attention from the grim reality that the Bakries and their ally Samin Tan are controlling this process,” Rothshcild said today in e-mailed comments. His NR Investments Ltd. plans to vote against the reappointment of most of the board next week, the statement shows.
PIRC also said it is unable to support the approval of Bumi’s annual report and accounts “on the basis that the auditors have qualified the accounts and a substantial sum of money is not accounted for and proper records have not been kept,” it said June 18.
Bumi shares, which plunged 69 percent last year, closed at 259.3 pence on April 19, the last day they were traded, giving the company a market value of 625 million pounds ($968 million).
The creation of Bumi brought together Rothschild and the Bakries, a family-owned palm oil-to-property empire founded in Sumatra in 1942. Waning coal prices, board infighting and probes in London and Indonesia including an investigation by Macfarlanes LLP into alleged financial irregularities have weighed on the stock.
The Bakries have proposed exchanging their 23.8 percent of Bumi Plc for 29.2 percent of Bumi Resources in a cash-and-share-swap deal, leaving Bumi Plc in control of Berau Coal. Bumi shareholders were previously scheduled to vote on the deal at the AGM.
The company hopes to complete the vote “before autumn,” Chief Executive Officer Nick von Schirndingsaid in an interview last month. The board remains committed to the plan and talks are continuing, Bumi said today.
The company has previously sought assurances from the Bakries that they will be able to fund the cash component of their offer, and Von Schirnding said last month he’ll be enforcing the terms of the original October proposal, which included a $278 million cash component.
The Bakrie Group have made an initial $50 million payment and has said the remaining funds are available.
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