NG group Bumi yesterday called in City law firm Macfarlanes to investigate alleged financial irregularities at its Indonesian operations, as the firm’s share price plummeted almost 25 per cent following the news.
The allegations at the FTSE 250-listed miner, cofounded by financier Nat Rothschild, relate to Bumi Resources, in which London-listed Bumi holds a 29 per cent stake.
The company’s development funds, which focus on infrastructure, will be at the centre of the investigation. It is thought the irregularities relate to the $286m (£176.5m) of one-off accounting writedowns that Bumi made last year in Bumi Resources’ development operations. Mazars is auditor to Bumi Resources.
Ari Hudaya, non-executive director of Bumi and president director of Bumi Resources, yesterday stepped down from the board with immediate effect.
A source close to the Rothschild side of the board said of the investigation yesterday: “This is the first stage in a long road to allow all investors, and not just the Bakries, to share in the future profits of the business.”
Deputy chairman of Bumi, Julian Horn-Smith, yesterday told City A.M. that the board will form a “robust stand” to ensure the matters surrounding financial irregularities are resolved.