Bumi denies insider trading allegations

The management of PT Bumi Resources Tbk has denied rumors of insider trading during its recent private placement process, Investor Indonesia newspaper reported in its Friday edition.

Bumi?s shareholders Long Haul Holding Limited and Minarak Labuan sold 1.8 billion shares or 9.3 percent of total Bumi shares to a group of selected investors through private placement last week.

?I think it?s (insider trading) not there. Moreover we?re a public company. Bumi?s president director will announce all the details to the public very soon,? Bumi?s commissioner Suryo B. Sulisto told Investor in Jakarta on Wednesday.

The above denial came following the request of chairman of Capital Market Supervisory Board (Bapepam) Herwidayatmo to Jakarta Stock Exchange (JSX) to examine the transaction of Bumi?s shares.

The share transaction was made by two foreign brokers ? BNP Paribas and Credit Lyonnais Capital ? in two phases, on December 9 and January 16, 2004.

Examination is needed to know whether the purchase was related to insider information and led to insider trading. And BNP Paribas was the financial advisor for the BUMI?s private placement.

Meanwhile, Indonesian Society for Investor and Securities (MISI) chairman ND Murdani said Bapepam?s action regarding insider trading is timely.

It shows Bapepam is responsive to suspected matters in the stock trading. This will make market positive,? Murdani said.

In responding to allegations of insider trading, Bumi?s finance director Eddie J. Soebari said that transparency was maintained in the private placement process, by both purchaser and seller and they informed to the JSX as per the mechanism.

?Later, if there is an investigation because of other matters, please go head. Its JSX?s authority. But we don?t see it is going in that direction,? Eddie said.

Bumi is the majority shareholder in East Kalimantan-based coal mining giant PT Kaltim Prima Coal (KPC). (*)