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Bumi award puts Indonesian market watchdog under spotlight
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The stock market regulator put itself under the spotlight again after it decided to attend an event and present a good governance award to publicly listed coal giant PT Bumi Resources — the same company it had placed under investigation regarding recent acquisition deals, reported local daily the Jakarta Post.
At a ceremony in Tabanan, Bali on Monday evening, Fuad A. Rahmani, chairman of stock market and financial institutions supervisory agency (Bapepam-LK), presented the Good Corporate Governance award from the Indonesian Institute for Corporate Directorship (IIDC) to Bumi.
The move, said the paper, can be seen as having made a mockery of the ongoing investigation being carried out by Bapepam and IDX over Bumi’s recent acquisition deals, that some analysts saw as being overpriced and lacking in transparency.
Bapepam launched the investigation in February over Bumi’s acquisition deals worth 6.18 trillion rupiah ($525.3 million) in January, involving the purchase of three local mining companies — Dharma Henwa, Fajar Bumi Sakti and Pendopo Energy.
Not long after the acquisition announcement, Bapepam alleged that the deals might be overpriced and possibly between linked companies, eventually leading to the setting up of an investigation team.
The IDX also set up an independent auditing team to determine the appropriateness of the acquisition deals. The examination by the auditing team is still ongoing and no result has been announced so far.
The acquisition deals and the investigation that followed was the latest high profile case involving Bumi, the most prized subsidiary of PT Bakrie and Brothers, an investment flagship of the powerful family of Aburizal Bakrie, the Coordinating Minister for People’s Welfare.
The collapse of prices in the shares of Bakrie’s subsidiaries, most notably Bumi, contributed to the sudden local stock market collapse last October, which was triggered by a combination of bearish regional sentiment and widespread concerns in the domestic market that Bakrie might not be able to pay debts of about $1.2 billion.
Before the October battering, Bumi was the company with the largest market capitalisation in the IDX, having overtaken the long-time occupier of this position, the country’s largest telecommunications company, PT Telkom.
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