Timah to form internal audit commission

Publicly listed tin mining firm PT Timah has decided to form an internal audit commission to find out the reason behind the company?s financial difficulty, Bisnis Indonesia reported on Thursday.

The team which would be helped by an independent consultant would be established to find out if the company?s management had made a big mistake in portfolio investment program.

Analysts said that the financial distress suffered by PT Timah is not only due to the fall in tin prices but also because of the management?s wrong investment programs, particularly in its direct investment in some companies.

But the chairman of the Capital Market Supervisory Agency (Bapepam) Herwidayatmo said that the company?s shareholders? meeting is the only forum which has the rights to determine if the management?s investment policy is wrong.

He said every company has their own investment policies and each management has the responsibility to direct what kind of policies the company will adopt.

In the past several years, PT Timah has invested a lot of fund to buy commercial papers issued by other companies in addition to direct investment in other companies. One of the company?s investments in commercial paper or notes went wrong when the issuer failed to repay its debts.

BPUI financing company, for example, has failed to repay back its debts in the form of notes worth US$17 million and Rp 61 billion to PT Timah. (*)