Shares in Axis Bank were down on concerns over credit provided to Indonesia’s PT Bumi Resources,whose parent company,Bumi Plc,launched an investigation into alleged financial irregularities at its Indonesian operations.
On August 4,2011,BUMI entered into a credit agreement with Axis Bank Limited to provide the company a credit facility of $200 million for capital expenditure and to repay an older more expensive facility,PT Bumi Resources TBK had said in its 2011 annual report.
The debt does not appear to be at the operating company or Special Purpose Vehicle level. The lending seems to be to the Indonesian parent (i.e. PT BUMI Resources) and to subsidiaries that are not the ones that hold the key mines,Barclays said in a note on Tuesday.
Bumi Plc,the coal mining group controlled by Indonesian investors including the influential Bakrie family,said on Monday it had commissioned an independent investigation into allegations concerning its Indonesian subsidiaries,including 29-percent owned PT Bumi Resources,Asia’s biggest exporter of thermal coal.
Senior executives at Axis Bank were not immediately available to comment.
At 11.30 am.,Axis Bank shares were down 3.7 percent at 1,091.50 rupees.
Stocks More on Axis bank