UK lawmakers to probe transparency of mining, oil firms

Britain's parliament is to probe UK-based mining and oil firms after troubles at two mining companies burnt some investors' fingers

Britain's parliament is to probe UK-based mining and oil firms, delving into areas such as transparency and disclosure after troubles at two mining companies burnt some investors' fingers.

Parliament's Committee for Business, Innovation and Skills will meet next month to set the terms of reference for the inquiry and could hear evidence before the beginning of lawmakers' summer recess in July.

Troubles at Kazakh miner ENRC and Indonesia-focused Bumi have sparked a debate in London around corporate governance and the issue of owners with controlling majorities.

ENRC is being investigated by the Serious Fraud Office (SFO), while shares in Bumi, battered by a standoff between founder investors, are suspended until it can conclude a review of the accounts of a key Indonesian unit, and publish its 2012 earnings.

ENRC shares have slumped from a peak of 1,276 pence set in early 2010 to trade at 265.8 pence by 1515 GMT on Tuesday, while Bumi had dropped from a 1,215p high to be suspended at around 259p.

"We have formally agreed to go ahead with the inquiry. It will be much more wide-ranging than the issues around Bumi and ENRC," committee chairman Adrian Bailey said, adding the probe would aim to not cut across work already being carried out by the SFO.

Parliamentary committees often bring political pressure to bear on companies by calling witnesses to give evidence and then publishing reports. While their findings have no legislative weight, findings are aimed at influencing government policy.

Bailey said the committee would look at the economic benefits of having oil and mining firms headquartered in London, as well as other issues such as skills, transparency, protection of the natural environment and community relations.

Scandals at Bumi and ENRC have overshadowed some of the successful stock market listings in the industry over the past decade, prompting a debate over stock exchange rules.

The UK Listings Authority, which supervises the terms on which companies join the London Stock Exchange, has already proposed stricter 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.