The problem arose when it foreign investors questioned a PGN audit done by the discredited Arthur Andersen accountancy firm and demanded that another audit be conducted. PGN has complied and its new audit - conducted by Ernst and Young - will be filed this week with the Indonesian Capital Markets Supervisory Board.

The IPO is expected to raise between US$200 million to US$300 million for the government. It is being promoted by ABN AMRO Rothschild, Credit Suisse First Boston and Danareksa Sekuritas.