A leading investor body has launched a withering attack on the beleaguered natural resources company Bumi, but dealt a blow yesterday to founder Nat Rothschild's attempt to oust its board.
Pirc, which advises some of Britain's biggest pension funds on voting decisions, said the fact that the scandal-hit business was allowed to list in London was an "indictment" of the listing rules.
It backs candidates put up by Mr Rothschild who satisfy its criteria for being appointed as independent non-executive directors, as well as the replacement of Nick von Schirnding as chief executive by Mr Rothschild's candidate, Brock Gill, because of the latter's greater "mining experience".
However, it has urged shareholders to oppose Mr Rothschild's election, and to abstain on his candidate to become chairman, Wallance King, because of their "prior business relationship".
Pirc has also advised shareholders not to vote against existing independent directors, but to back the removal of directors with links to Indonesia's Bakrie family, some of whose mining assets were reversed into Bumi when the business was created by Mr Rothschild. The relationship rapidly soured and the share price tumbled amid a series of claims and counter-claims between the two sides.
This led Mr Rothschild to call an extraordinary general meeting with the aim of electing his own slate. Already one voting adviser, ISS, has opted to oppose his candidates, voicing concerns that their election could hamper a resolution of the situation.
The Bakries would like to buy their mining assets back, but at a price representing a big loss to Bumi.
Pirc said in its report: "Arguably, this is one of the biggest float fiascos seen on the London Stock Exchange in recent years and in Pirc's view should have never been listed in the first place."
A spokesman for Bumi hit out at the report, claiming it contained "inaccuracies".
"It should not be relied upon by shareholders," he said.