The scandal that emerged earlier this week about malpractice at Bumi plc’s Indonesian subsidiaries should not surprise anyone. London Mining Network and others have been speaking about Bumi’s unacceptable practices for months. Bumi was one of the case studies in our February 2012 report, UK-listed mining companies and the need for stricter oversight. LMN member group Down to Earth published an expose of the company’s record in May: An Indonesian coal company on the London Stock Exchange. And a number of us warned shareholders at the company’s June 2012 AGM:
Now the scandal has prompted the regulatory body, the Financial Services Authority, to begin – belatedly – to take action. What is needed is a root and branch reform of the way London-listed companies are regulated, so that they can no longer get away with the kind of human rights abuse and environmental destruction that have characterised the operations of so many mining companies registered in London. See our February report for our recommendations.
FSA to tackle listing rules as Bumi debacle escalates
London’s ambitions to attract foreign-owned mining companies have suffered a sharp blow with the announcement by Bumi Plc of an inquiry into alleged irregularities at subsidiaries, just days before a clamp-down on listing rules. The Financial Services Authority (FSA) will publish proposals next Tuesday designed to protect investors and ease concerns that London-listed companies such as Bumi, an Indonesian coal venture co-founded by financier Nat Rothschild, are diluting standards of corporate governance.
See also:
BUMI’s rating cut amid irregularities probe
Indonesia’s Bakries could split from tycoon Tan over Bumi dispute
Indonesia’s Bumi Resources Blames Bumi PLC Allegations on ‘a Few Shareholders’