Bumi shares resume trading

The Jakarta Post, Jakarta

Shares in publicly listed mining concern PT Bumi Resources resumed trading on the Jakarta Stock Exchange on Wednesday after the company provided an explanation to market authorities over a controversial plan to acquire a giant coal mining firm.

"We think the explanation given to us is sufficient, so we decided Bumi shares could be traded again," said JSX director for supervision Sihol Siagian.

Bumi, however, has to report on developments in its acquisition of the coal mining firm until the move is completed in October as scheduled.

Bumi shares closed at Rp 105, Rp 30 higher than the price on July 29 when trading in the shares was suspended.

The JSX suspended trading a few days after reports from the press that Bumi would acquire East Kalimantan-based PT Kaltim Prima Coal, the country's largest coal miner, from BP Plc. and Rio Tinto for US$500 million.

The deal, however, raised controversy partly because it was made at a time when a team led by the Office of the State Minister of State Enterprises was still in talks with the East Kalimantan authorities to seek a solution to years of dispute between the regional administration and KPC shareholders.

East Kalimantan has insisted it wanted to buy the KPC shares. KPC is obliged to divest up to a 51 percent stake to local investors under its contract with the government.

Another controversial matter is the lower price offered by KPC shareholders to Bumi compared with the price agreed by the government team.

Elsewhere, Sihol said that in relation to alleged insider trading in Bumi shares, the market authorities had not found evidence of this.

The price of Bumi shares surged to new highs before the planned acquisition was announced.