Tuesday October 16, 2012

Rothschild quits Indonesia's Bumi Plc

JAKARTA: Indonesian miner Bumi Plc. said Nathaniel Rothschild had resigned from its board, in the latest twist to the British tycoon's battle with the powerful Bakrie family for control of the firm.

His resignation came as Bumi's board considers a proposal by Indonesia's Bakrie family to sever their ties with the company and buy the key mines it owns in the country.

Rothschild's move, and his comments in a strongly-worded resignation letter issued Monday, prompted the Bakries to hit out at the Briton, calling him a "threat to shareholders".

The ongoing row has seen London-listed Bumi's shares slump more than 70 percent this year.

At the heart of the dispute is a Rothschild-backed investigation into the Bakrie-founded Bumi Resources, Indonesia's largest coal miner, which is part-owned by Bumi Plc.

Bumi Resources is one of a string of companies owned by the family of Aburizal Bakrie, one of Indonesia's wealthiest men and a probable candidate in presidential elections in 2014.

The Bakries have offered to give up their 23.8 percent stake in Bumi and pay about $1.2 billion for its mines, which would leave the firm with no assets other than the cash from the deal, while returning control of some of Indonesia's most productive mines to the Bakries.

In the resignation letter quoted by Dow Jones Newswires, Rothschild said he was against the Bakries' proposal to withdraw from Bumi Plc in exchange for its Indonesian mining assets, including the under-scrutiny resources company.

The scion of a European banking dynasty said the move would be a "disgrace" without first completing a probe into alleged financial irregularities at Bumi Resources.

He expressed his determination to fight for the company's investors from outside the board and said he regretted helping to bring the Bakrie family into the Bumi Plc fold.

After the London-listed firm announced Rothschild's resignation, the Bakries were swift to hit back Tuesday, saying Rothschild should have resigned earlier to avoid the stock from plunging, and registering their "disappointment" over his criticism.

"Mr. Rothschild is a threat to all shareholders who are fighting for the best interests of the company, and ultimately for themselves and the investors they represent," spokesman Chris Fong said.

"There are no winners in this deal anymore, it's pure damage control."

The offer for the break-up from the Bakries followed an investigation order by the Bumi Plc board in September over "potential financial and other irregularities", including a $637 million writedown of development funds and assets in Bumi Resources.

Rothschild was ousted as co-chair of Bumi Plc in March after calling for a "radical clean-up" of the Indonesian firm. - AFP