Bumi boss tightens controls as $201m hole is discovered

 

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The Independent Online

The chief executive of Bumi, the scandal-ridden Indonesian coal group founded by the one-time wild-child scion of the Rothschild dynasty, has pledged that his overhaul of the company is not a “light touch”.

Nick von Schirnding has centralised authority, so that any transaction over $1m (£659m) has to be signed-off by the executive committee as opposed to $20m, in the wake of unaccounted expenditure of $201m at its main subsidiary, Berau.

After announcing a $2.4bn pre-tax annual loss, Mr von Schirnding admitted “the mess is bigger than I thought” when he took over Bumi at the end of last year.

Bumi’s shares were suspended at the board’s request last month, but  Mr von Schirnding is confident he will be able to ask the listing authorities to resume trading ahead of the company’s annual meeting on 26 June.

Bumi said in April that it could not verify some of its expenditure at Berau and called in Ernst & Young  and PricewaterhouseCoopers  to investigate.

Mr von Schirnding said: “Some of the transactions relate to companies that we haven’t heard of, [there is correspondence] that has suspiciously similar letterheads. Clearly, we didn’t have the right people doing the right jobs and we’ve removed a number of key people from a number  of positions.”

Nat Rothschild co-founded Bumi three years ago, but fell out with his partners, the Bakrie family, within months. Mr Rothschild failed to wrest control of the company from the Bakries, who are now in the process  of splitting  from Bumi.

“Starting in December 2011, I have consistently warned the board of appalling malfeasance at Bumi,” Mr Rothschild said yesterday.

“The independent non-executives, led by Julian Horn-Smith, my co-founding director, owe us an apology.” 

Still a major shareholder in Bumi, Mr Rothschild wants to see the chairman Samin Tan removed from the board and previously failed in attempts to oust Sir Julian and Mr von Schirnding. Mr Tan replaced Indra Bakrie last year.

Mr Rothschild added: “There has been clear fraud occurring at Berau. In the face of this, Bumi PLC’s board has been inconsistent, slow to act and has given inadequate disclosure on a number of issues.” 

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