Nat Rothschild attacks 'inferior' Bumi deal

The billionaire financier Nat Rothschild has accused the board of the miner Bumi of subjecting long-suffering shareholders to an "inferior" deal, as the scandal-scarred group desperately tries to untangle its convoluted ownership structure.

The scion of the Rothschild banking dynasty has fought a long-running battle to wrest back control of the Indonesia-focused group he co-founded with the Bakrie family in 2010.

Mr Rothschild and the Bakries fell out soon after floating Bumi on the London Stock Exchange, while hundreds of millions of dollars were found to have gone missing earlier this year and the shares have been suspended since April.

A ray of light has been that the Bakries have been in talks to sever ties with Bumi for the past nine months. This was a cash and shares proposal that would have cleared up ownership of various key assets and cancelled the Bakries' nearly one-quarter stake in Bumi.

However, yesterday Bumi confirmed details of an alternative, very differently structured proposal which it insisted was economically "consistent" with the original option.

Under the new terms, the outgoing Bumi chairman, Samin Tan, would double his shareholding in the group to nearly 48 per cent by buying out the Bakries. The two-stage deal would then see the Bakries buy back Bumi's 29.2 per cent stake in the similarly named PT Bumi business for more than $500m (£335m). This would finally unwind a complicated ownership structure that has confounded the City and infuriated investors.

Mr Rothschild, who quit Bumi's board in October but remains a major shareholder, argued that the "new proposal deprives minority investors of any upside in respect of the Bakrie stake in Bumi".

He also renewed his attack on Mr Tan, arguing that the proposal "consolidates" his control of the business. By owning nearly half of Bumi's stock, Mr Tan has to make an offer for the whole of the business under takeover rules, but this is not part of his thinking, and so would need a waiver to drop this requirement.

Mr Tan is due to step down as chairman once a successor has been identified, but Mr Rothschild believes he should leave the board immediately.

Mr Rothschild added: "The primary source of Bumi plc's difficulties over the past three years has been the concentrated control by the Bakrie concert party, which included Samin Tan. This deal does not change that."

Instead, he would like to see individual shareholders given the opportunity to first purchase parts of the Bakries' stake. Mr Tan would then be allowed to take up any stock that is not sold.

Nicholas von Schirnding, Bumi's chief executive, has been stunned by the "mess" he inherited after taking over at the start of the year. Most notably, there was a $201m black hole of unauthorised expenditure at the group's PT Berau business, which has led to a wholesale review of financial controls at the group.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

‘We won’t stop until Syria is back to normal’

Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

The inside story of how Bill Clinton built a $2bn global foundation...

... and how it may undermine Hillary's chances in 2016
12 best olive oils

Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
Rafa Benitez Real Madrid unveiling: New manager full of emotion at Bernabeu homecoming

Benitez full of emotion at Bernabeu homecoming

There were tears in the former Liverpool manager’s eyes as he was unveiled as Real Madrid coach. But the Spaniard knows he must make tough decisions if he is to succeed
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?