Kalila and Pan Asia is the owner of 100% shares of Lapindo Brantas Inc, the unit of Energi Mega that has become the operator for Brantas PSC oil block. Reportedly the two companies have spent IDR3.5 trillion to handle the problem of hot mud flooding in Sidoarjo.

The Bureau Chief of Financial Assessment for Industrial Sector of Bapepam LK, Nurhaida, said the authority will summon the company next week as it has not got any explanation on the issue.

"We have seen their financial report. We will summon them next week to clarify the transfer [of Lapindo Brantas]," she said yesterday.

She added the authority want to know the transfer of Lapindo Brantas and the impact to Energi Mega and why the financial reports of the two units were not consolidated into the company's financial statement.

She will learn on whether the company has complied with capital market regulation and the accounting principle and on whether there has been conflict of interest. "We want to make sure on that, and later we will see the impact."

He said the company is required to report its corporate actions for the sake of transparency as a publicly listed company.

The Vice President Capital Markets of Energi Mega Herwin Hidayat said previously it will ask for shareholders' approval in the next EGMS.

Bisnis Indonesia September 14, 2007