Bumi Plc. Says Rp1.9 Trillion Missing in Berau

TEMPO.CO, London - London-listed coal producer Bumi Plc (LSE: BUMI), said there is a US$201 million of spending by its Indonesian subsidiary, PT Berau Coal Energy Tbk (IDX: BRAU), that has "no clear business purpose."

Bumi's statement said that the unaccounted spending at Beray comprises of transportation charges, land compensation payments, consultation fees and and goodwill costs.

"This happened at various levels in the organization, it happened around procurement, around certain contracts, and so we are investigating those parties,” Chief Executive Officer Nick von Schirnding told reporters in London.

About US$152 million is allegedly missing from Berau's finances in 2012 and while another US$49 million is from the year before.

When asked to confirm, Berau spokesman Bintoro Prabowo said the fund losses were the result of a reclassification of expenses that do not have sufficient evidence.

"The company has reclassified these costs to other expenses and charged it in the current fiscal year," he told Tempo yesterday.

He said the company has been in talks with a number of related parties "to achieve the best solution for all." According to Bintoro, Berau Coal will continue to uphold good corporate governance. "One way is by having control of internal costs," he said.

Von Schirnding stated that because of the dispute between shareholders, Bumi Plc.'s stock price has plunged 80 percent on the London Stock Exchange since July 2010. To date, LSE authorities still suspend BUMI from all transactions.

Berau Coal is the subsidiary of Bumi Plc, currently at the center of a dispute between its founders, Bakrie Group and Nathaniel Rothschild. Bakrie Group proposed swapping their 23.8 percent stake in Bumi Plc. for 29.2 percent of Bumi Resources in a cash-and-share swap deal, leaving Bumi Plc. in control of Berau Coal.

Stephen Bullock, an advisor at Crowe Clark Whitehill, a British financial consulting firm, said that Bumi Plc's image and reputation as a major mining company would be difficult to recover. The problems faced by Bumi Plc. cannot be resolved simply by improving its financial administration.

According to Bullock, the issues convoluting Bumi Plc make investors doubt its management's performance. "It's bad publicity," he said.

RIZKI PUSPITA SARI | AMRI MAHBUB | GUSTIDHA BUDIARTIE | ABDUL MALIK