The financial governance of PT Trada Alam Minera, an affiliated company, is one of the causes of Jiwasraya’s bankruptcy (mining company case)

Abstract

This paper presents an analysis of the financial governance of PT Trada Alam Minera (TRAM). This company has been suspended by the Indonesian Stock Exchange, because it was one of the causes of Jiwasraya's bankruptcy. This paper presents in a coherent and scientific manner the fundamental financial conditions of PT Trada Alam Minera from 2012 to 2017. The year 2012 was chosen to analyze the company's financial foundations before the share purchase event by PT Jiwasraya and after the event, namely 2015 to 2018. Financial governance analysis was carried out on important components of financial fundamentals including total assets, debt, equity, cash flow from operating, income, net profit or loss, and dividends. The analysis was conducted to determine the soundness and potential risks of PT Trada Alam Minera's fundamental financial management from 2012 to 2017. This paper provides solutions for appropriate financial governance in this case, ensuring that similar misinvestment cases do not recur. The results show that PT Trada Alam Minera's financial management for its financial position, profit and loss statement, cash flow from company operations, and dividend distribution from 2012 to 2017 was fluctuating, inconsistent, and unfavorable. Therefore, it can be concluded that PT Trada Alam Minera lacked strong fundamental financial management from 2012 to 2017.