Nathaniel Rothschild failed yesterday in his attempt to oust the board of Bumi plc, the company he co-founded with Indonesia's Bakrie Group in 2010. The result means that the UK-listed natural resources firm will move ahead with the Bakries' offer, made last October, to leave the venture in return for full control of one of its operating companies, Bumi Resources, which is Indonesia's biggest coal miner.
The extraordinary general meeting was called last month after Rothschild bid to replace 12 out of 14 directors, and have himself reappointed to the board. Yesterday, shareholders rejected 19 of his 22 proposals, with his attempt to return to the board that he left last year gaining the least amount of support — only 37% of votes.
Rothschild did manage to remove two directors, Nalin Rathod, who is a friend of the Bakries, and Jean-Marc Mizrahi, another Bakrie ally. Rathod will be replaced by Richard Gozney, a former British diplomat. However, shareholders voted to keep chairman Samin Tan and CEO Nick von Schirnding on the board. Rothschild and his supporters mustered around 30% of the votes.
His move was intended to force a separation from the Bakries, under different terms to their own, and pursue his claims of financial irregularities at Bumi plc’s operating subsidiaries. His failure comes after two years of constant bickering between the two founding partners and a disastrous performance by Bumi's share price, which has fallen by two-thirds since the $3 billion IPO in 2011.
There have been allegations of theft or misuse of up to $1 billion from Bumi Resources, computer and phone hacking, a lack of transparency and poor corporate governance in an often vitriolic public relations battle between Rothschild and the Bakries, a leading Indonesian business family.
After yesterday's meeting at London’s Armory House, Rothschild described the board’s victory as “pyrrhic”, noting that most of its backing came from the Bakries and their associates.
On Monday, one of the original partners, Rosan Roeslani, sold his 13% stake in the company to three new investors, including another Indonesian tycoon. Roeslani had been considered by the UK Takeover Panel to be in concert with the Bakries so could not exercise his vote at the EGM. The new investors were not restricted.
In a sign that the saga is likely to continue to run, Rothschild repeated his call for the directors to resign due to their apparent failure to protect the rights of minority shareholders.
In a statement, Bumi said that the directors would focus on the separation from the Bakries through the sale of Bumi Resources, and that it would also replace the current chairman Samin Tan. A sale of Bumi Resources will leave Bumi with one operating subsidiary — Berau Coal, which is the fifth largest coal miner in Indonesia.
Bumi's shares closed up 3.2% at 391.3 pence ahead of the result of the vote.
