Rothschild rivals look for end to board row
NAT Rothschild could escape defenestration from the board of a company he brought to London this week, after his Indonesian business partners sounded a more conciliatory note following a week of meetings in London.
The Jakarta-based shareholders of Bumi plc, the FTSE 250 miner, have been trying to get Rothschild voted out as co-chairman of the company that he brought to the City via a reverse takeover by Vallar, a £1bn cash shell he floated on the LSE last year.
Bumi’s biggest Indonesian shareholders, the family-owned Bakrie Group and tycoon Samin Tan, wrote to investors 10 days ago calling for a vote to remove Rothschild and four directors from the board and replace them with allies.
But after sending representatives to London for a week of meetings, the Bakrie Group said it is open to negotiating a compromise.
Non-executive director Sir Julian Horn-Smith will meet with the Bakries today in Jakarta in an attempt to thrash out a deal.
The row has the potential to turn nasty quickly if a deal cannot be reached. But Bakrie spokesman Chris Fong told City A.M.: “The whole idea of adjusting the board was to focus it on the asset. It’s not about Nat being on or off the board. It’s about how we’re perceived. We want to be perceived correctly.”
Since the letter calling for Rothschild’s removal, Bumi’s share price has plunged 15 per cent on fears about corporate governance. That reaction has sparked fears in both London and Jakarta that a prolonged row could prove to be expensive.
Samin Tan, whose company Borneo Lumbung owns nearly a quarter of Bumi, is due in London this week to meet investors and is keen to outline his ambitions for the miner and tap up investors for more cash.
But he is instead likely to face a barrage of questions from City shareholders who are angry that Tan and the Bakries chose to call for Rothschild’s removal publicly, rather than in private.
The row means Tan will have to spend time pressing the case for Rothschild’s removal rather than focussing on his plans, underlining the mutual desire to end the row.
It is understood the Bakries and Samin Tan opted to write to shareholders rather than raise the matter privately with the board following leaks to the media from board meetings.
Last autumn, a letter from Rothschild criticising Bumi’s management was leaked to media before it had even reached the company’s directors, sparking fury from the Bakries and other shareholders.