NAT ROTHSCHILD last night resigned from the board of struggling coal group Bumi with immediate effect, claiming the firm was failing to act in the interests of its minority shareholders.
The move is the latest shock for the investment vehicle Rothschild himself put together less than three years ago and which has embroiled some of the world’s leading businessmen.
Rothschild said he was resigning in protest at a deal proposed by Bumi’s key Indonesian shareholders last week to split from the firm. In the terms, the Bakrie brothers called for Rothschild to give up bonus shares in the firm worth around £41m.
In his letter to board chairman Samin Tan, Rothschild said that the deal was “so obviously not in the interests of minority shareholders that I find it impossible to stay on as a director”.
He claimed that the value of the deal is skewed heavily towards Tan and the Bakrie brothers, who hold 23.8 per cent of Bumi each through a joint vehicle after Tan bought out half of the Bakries’ stake earlier this year. The Indonesian arm of London-listed Bumi – PT Bumi – is currently under investigation for alleged financial irregularities.
“It appears that you shall be reimbursed for your investment at a price of £10.91 a share, whilst other investors see an estimated return of just £4.30 a share,” Rothschild wrote, calling the plan “a clear breach of the spirit, and I believe, the letter of the takeover code”.
But a source close to Bumi said Rothschild left after the company’s board turned against him, rather than on principle. “Rothschild jumped before he was pushed – he was in a minority of one on the board,” the source told City A.M.
Rothschild brought the Bakries on board less than two years ago in a deal that combined his listed investment vehicle Vallar with Indonesian assets to create Bumi. Shares have lost almost 75 per cent in value since Vallar listed in 2010.
Last night the Bakries called on Rothschild to give up his shares – awarded on condition the deal was a success. “Mr Nat Rothschild has clearly taken care of himself without consideration to others,” a spokesman said.
Bumi said last night it had received Rothschild’s letter, and the board was examining the Bakries’ terms. “The independent directors are unanimous that a solution should be examined regarding a separation. But they have not formed a view on value,” said a spokesperson.