Return ‘flawed’ shares bonus, Bumi tells Nat Rothschild

Nat Rothschild was today called on to surrender his shares in Indonesian miner Bumi as the financier stepped up his battle to oust the Bakrie family and their supporters from the group’s board.

Rothschild brought Bumi to the market in 2010 when the Indonesian Bakrie brothers reversed coal-mining assets into cash shell Vallar. But the two factions have been riven by clashes over corporate governance, and Rothschild was deposed as co-chairman last year.

The group raised more than £700 million when it floated in July 2010 but the shares have since sunk 70% on a mix of board rows, falling coal prices and allegations of financial irregularity. Rothschild, who has a 12% stake, wants 12 of the current 14 directors ousted, and has called an extraordinary general meeting for February 21.

But Bumi’s senior independent director Sir Julian Horn-Smith, one of Rothschild’s targets, called on the financier to return the bonus shares he was granted in Bumi Plc after creating the company. Sir Julian said: “It is now clear that the deal and deal structure which Nat proposed and championed for Vallar has resulted in considerable losses for many shareholders. After meetings with shareholders, there is growing pressure from them for Nat to return these shares.

“The board believes it is unjust that Nat should be able to continue to own and vote these shares, which he received as the result of a flawed transaction. It is wrong for failure to be rewarded and this bonus should be clawed back.”

The Bakries plan to unwind their interests in Bumi under a “separation proposal” that involves buying back the holding company’s 29% stake in miner Bumi Resources. But the family warned last week that they would not go ahead if Rothschild’s proposals were accepted, potentially triggering a legal dispute that could take years to resolve.

Rothschild today said the board’s proposals would not achieve the exit of the Bakries and their supporters, and pledged to “implement best-practice corporate governance throughout the organisation”.