LONDON â€" Shares in a mining company partly owned by the financier Nathaniel Rothschild plunged on Monday after an investigation was opened into financial irregularities at one of its divisions.
Bumi, the company that owns stakes in several Indonesian mining operations, said it was investigating allegations at PT Bumi Resources, a coal mining company in which it holds a 29 percent stake. Bumi's shares fell as much as 37 percent in morning trading in London after the announcement, and by early afternoon, were still down 22.4 percent.
“We see this investigation as a positive development, although we feel it does have the potential to bring to light some gross and potentially criminal mismanagement of funds,†Richard Knights, an analyst at Liberum Capital, wrote in a note to investors on Monday.
The announcement from London-listed Bumi comes after a series of boardroom maneuvers between Mr. Rothschild and the Indonesian Bakrie family.
Last year, t he British banker, who helped to create Bumi after acquiring stakes in a number of Indonesia mining companies, had called for a shake-up in the management of PT Bumi Resources.
In response, Indra Bakrie, then the chairman of Bumi, and Samin Tan, an Indonesia mining mogul, moved to oust Mr. Rothschild from the running of the company that he helped to found.
After calling for a shareholder meeting earlier this year to reshuffle Bumi's executives, Mr. Tan took over as chairman, while Mr. Rothschild became a non-independent director.
The new allegations into activities at PT Bumi Resources relate to financial accounting records for last year, according to a statement on Monday from Bumi. The irregularities are in connection to investments that were marked down to zero, the company added.
“An independent investigation has been commissioned to investigate the allegations on an urgent basis,†Bumi said in a regulatory statement. “The company also inten ds to contact relevant authorities in the U.K. and Indonesia in respect of some of the allegations.â€
The company said it would make a further announcement upon the completion of its investigation.
