* Committee to consider proposed inquiry on Tuesday
* ENRC, Bumi among those expected to testify
By Clara Ferreira-Marques
LONDON, May 19 Britain's parliament will this
week consider whether to probe the transparency of oil and
mining firms listed in London, an issue highlighted by
corruption probes at emerging market miners which lawmakers fear
have dented the stock market's reputation.
The chairman of parliament's Committee for Business,
Innovation and Skills said on Sunday he would this week propose
an inquiry into issues including governance and anticorruption
protection at mining and oil companies.
The probe could start before the end of the parliamentary
session in July. The committee will, though, have to decide the
specific terms of the inquiry.
Parliamentarian Adrian Bailey said those set to give
evidence are expected to include executives from Kazakh miner
ENRC and Indonesia-focused miner Bumi, both
facing corruption probes that have hit already beleaguered
shares. The banks that advised the two could also be called.
He said the committee had already been considering a look at
the extractive industries but the current turmoil around ENRC -
now facing a buyout bid from its founders that would take it
private after just over five years - had given the inquiry
"We will be looking at the issue of transparency in general.
It is not an inquiry looking into just ENRC and Bumi," Bailey
said, adding that the concerns raised by those two miners would,
however, be central.
"We have not yet defined the focus of the inquiry, or indeed
decided whether we are going ahead."
Parliamentary committees often bring political pressure to
bear on companies by publishing reports and calling witnesses to
evidence sessions. While their reports have no legislative
weight, findings are aimed at influencing government policy.
Given the spotlight on London's reputation in recent months,
the inquiry is widely expected to go ahead and could, among
other things, look at the benefit of having major extractive
companies listed in London.
It would also look at whether Britain should sign up to the
Extractive Industries Transparency Initiative (EITI) as well as
examining mining and oil companies' roles in communities and
their environmental efforts.
The EITI, supported by the World Bank, was set up to improve
transparency and accountability in countries rich in mineral
Troubles at ENRC, the largest of the companies in question,
have made it the focus of headlines and a fierce debate around
foreign resources companies with majority owners. Boardroom
battles and corruption probes have helped drag its share down
more than 50 percent since the start of last year alone.
Indonesia-focused miner Bumi has been another listing
troubled from the start. Corruption probes and a damaging
shareholder battle between the founders - Indonesia's powerful
Bakrie family and financier Nat Rothschild - have added to low
coal prices, dragging the shares down almost 80 percent since
But Bumi and ENRC are only two of a clutch of foreign-owned
resource companies that have listed in London in the past
decade, transforming the once UK-focused bluechip FTSE index.
Scandals at both have overshadowed some of the successful
listings, prompting questions over governance, the number of
shares that should be required to be freely available for
purchase and the role of willing bankers. The UK Listings
Authority has proposed tighter entry rules, hoping to create a
higher hurdle for companies wanting to access the London market.
The revised rules, on which it consulted with the market
last year, could be published in the coming weeks.