Tax Investigation Puts Pressures on Bumi Share

as published in Bisnis Indonesia daily newspaper

Tuesday, 15/12/2009 00:00 WIB

Tax Investigation Puts Pressures on Bumi Share

JAKARTA: PT Bumi Resources Tbk share slumped 5.83% to IDR2,425 yesterday following massive selling triggered by negative sentiments in the wake of the investigation into tax crimes allegedly committed by PT Kaltim Prima Coal and PT Arutmin Indonesia.

A decline in the share price of Bakrie Group-owned coal company made its market cap slide by IDR2.9 trillion to IDR47.05 trillion from last weekend's position. Bumi share price yesterday once fell 8% to IDR2,375.

Head of Research at PT Syailendra Capital Lanang Trihardian revealed the 2007 tax arrear issue was the main factor putting Bumi share price under pressure.

He informed this was not the first time that the national largest coal producer and exporter was investigated for tax arrears.

"The financial statement indeed is quite abnormal. Its tax-to-revenues ratio is only 5%, far lower than 40% recorded by other coal producers."

In the wake of this case, he recommended investors being conservative against Bumi shares on a possibility that the company might have its earnings declined if it serviced its tax arrears in 2010.

Director General of Taxation Mochamad Tjiptardjo last week exposed the Directorate General of Taxation was conducting an investigation into tax crime cases worth IDR2 trillion allegedly committed by KPC, Arutmin, and PT BR.

The statement came up after the dispute between Minister of Finance Sri Mulyani Indrawati and Chairperson of Golkar party Aburizal Bakrie was made public, triggered by Sri Mulyani's statement printed in Thursday edition of The Wall Street Journal last week.

In the meantime, President Director of Indonesia Stock Exchange (BEI) Ito Warsito would ask about the investigation into KPC and Arutmin to the management of Bumi, the holding company of the two coal companies.

"We officially have to ask questions about the investigation, but we won't do that hastily since the bourse has its own process."

Corporate Secretary of Bumi Dileep Srivastava stated the company was waiting for further explanation from the taxation authorities to have the same perception. (Bisnis/pul/21)