Featured Posts

Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

Read more

Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

Read more

Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

Read more

Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

Read more

UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

Read more

Bumi grants founder Nat Rothschild’s request for shareholder meeting

Category : Business

Rothschild, who quit four months ago over alleged financial irregularities, wants to return to mining company’s board

Indonesian mining company Bumi has consented to a demand by its founder Nat Rothschild to hold a shareholder meeting but launched an attack on the former director of the London-listed company.

Rothschild, who quit four months ago over alleged financial irregularities, wants to return to the board.

But Sir Julian Horn-Smith, the senior independent director of Bumi, said in a stock market statement that Rothschild’s “time as a director of Bumi was characterised by taking highly confrontational positions that proved counterproductive to addressing the company’s issues”.

Horn-Smith, a former director of Vodafone, had been on the board of Rothschild’s acquisition vehicle Vallar, which became Bumi after taking a 29% stake in the mining business controlled by the Bakrie family in Indonesia.

Rothshild quit after declaring he had “lost confidence” in the board to protect investors in Bumi from a proposal by the Bakries to take control of mines.

His call for a shareholder meeting to remove 12 of the current 14 directors on the Bumi board won early support from Schroders, which owns more than 4% of the company, and was said to be backing Rothschild in his effort to remove the directors.

Shares in the company were the biggest gainers in the FTSE 250, jumping nearly 20% to 288p, although they remain well below the £10 at which they were floated on the stock market in July 2010.

The shareholder meeting will be held in February and Bumi said it would provide shareholders “with a clear choice” between the current management or the changes proposed by Rothschild.

Nat Rothschild reveals plan to buy out Bumi board members

Category : Business

Nat Rothschild said he had raised £213m to buy out the rival board members, chairman Samin Tan and Rosan Roeslani

The saga of mining firm Bumi took another twist on Monday night as the banking scion Nat Rothschild said he has persuaded the five largest institutional investors to back his plan to save the business.

Rothschild is attempting to oust influential Indonesian family the Bakries from the London-listed company, which the two dynasties set up before falling out.

Writing to the company’s board, Rothschild said he had raised £213m to buy out the Bakrie-influenced board members, chairman Samin Tan and Rosan Roeslani, while keeping coal assets in Indonesia.

He claimed the support of 11 independent investors with a “desire to invest new equity capital into the company, in order to remove completely the Bakries and their allies from the Bumi plc shareholder register”.

The announcement comes days before a preliminary report is due to be presented to the board into allegations of irregularities at the company’s Indonesian operations.

The Bakries had planned to quit Bumi and dismantle the company by buying back stakes the company had in two coal producers – Bumi Resources and Berau Coal Energy – for $1.4bn.

Rothschild quit the board over the plans, which valued the shares at £4.40 each, compared with a £10 flotation price. On Monday he said: “My understanding is that the thresholds required by the Bakries to see their proposal succeed cannot now be reached.”

Investors supporting his plan include Abu Dhabi Investment Council, Schroders Investment Management, Standard Life Investments, Taube Hodson Stonex, and Artemis Investment Management.

Bumi’s board, from which Indra Bakrie resigned as co-chairman last week, will consider the proposal and respond in the next few days, according to sources close to the company.

However, it will be difficult to persuade Tan and Roeslani to sell their stakes, another source said.

A report by law firm Macfarlanes into the alleged misuse of funds in Bumi’s Indonesian operations, which include a 29% stake in Bumi Resources and 85% in Berau Coal, is expected on Wednesday.

Rothschild alleged: “There has been a scandalous misuse of shareholders’ funds at Bumi Resources and Berau … Furthermore, Samin Tan has done nothing to stop it: in fact it has increased under his chairmanship.”

The investigation was triggered after a whistleblower in Jakarta sent documents relating, in part, to a £198m writedown the company made last year on a business owned by Roeslani – who also sits on Bumi’s board.

Relations between the Bakries and Rothschild collapsed shortly after the latter helped bring the mining firm to the London Stock Exchange through a shell company.

However, Rothschild, who was then chairman, raised issues of corporate governance with the Bakrie family, which includes presidential candidate Aburizal Bakrie.

The Bakries demanded Rothschild step down, which he did, taking up a position as a non-executive director.

Bumi confirmed it had received Rothschild’s letter and would respond accordingly.

Nat Rothschild set to block Bumi’s $1.4bn buyout

Category : Business

Nat Rothschild has joined forces with Indonesian presidential candidate, Prabowo Subianto to mount a counter bid for Bumi

Banking scion Nat Rothschild is forming a consortium to launch a counter-offer for Bumi, the mining firm he set up, in a bitter battle against the powerful Indonesian Bakrie family.

The struggle over Bumi, which was brought to the London Stock Exchange by Rothschild with the backing of one of Jakarta’s most powerful families, including presidential candidate Aburizal Bakrie, has seen the two dynasties fall out spectacularly.

Rothschild is planning to team up with another Indonesian presidential candidate, Prabowo Subianto, among others, to thwart the Bakrie’s $1.4bn (£867m) plans to buy out Bumi, according to Reuters.

The Bakries had planned to quit Bumi and dismantle the company by buying back the stakes the plc has in two coal mines – Bumi Resources and Berau Coal Energy.

News of a counter offer by Rothschild sent Bumi shares up 14% to 283p, however they are still a long way off their £10 flotation price.

The buyout plan by the Bakries involves swapping their Bumi Plc shares for part of the 29% stake in Bumi Resources held by the London-listed company, then buying the rest of the stake for cash, before acquiring Bumi Plc’s 85% stake in Berau.

Buying out the 29% stake is seen as straightforward, but prising away from the London listed company its 85% stake for Berau – Indonesia’s fourth largest coal mine – could prove more difficult.

Rothschild quit the board as a non-executive director after the Bakries made their offer to buy out the company, saying it would not be in the interests of shareholders to accept the deal. He said at the time: “It will be a disgrace to proceed with, or even to entertain the proposal.”

He was forced out as co-chairman after writing to the Bakries demanding a clean up of the company’s operations.

The resignation came soon after the London-listed company launched an investigation into “financial irregularities” at Bumi Resources in Indonesia, after a whistleblower in Jakarta sent documents relating, in part, to a £198m writedown the company made last year on a business owned by a member of the board.

Since Rothschild stood down, the mudslinging between him, the Bakries, and Bumi chief executive Samin Tan – a Bakrie ally – has continued.

Emails emerged last month revealing that Rothschild was told if he did not step down, Tan and senior non-executive director, Sir Julian Horn-Smith, would leave. Tan said Rothschild had been persistently disruptive, and had hinted he could send the businessman to jail suggesting he had been hacking Tan’s emails.Rothschild denies all the allegations, calling them untrue and defamatory.

It is thought any deal Rothschild hopes to agree would see Bumi remain as a London-listed company with interests in Indonesian mining. Talks between several parties are ongoing with numerous businessmen being courted by Rothschild as he attempts to repair his reputation from the Bumi fallout.

In response to the rise in the share price Bumi issued a statement saying: “Bumi plc notes the movement in its share price following a number of articles in the media on a possible proposal from Nat Rothschild. Bumi plc confirms that it is not in receipt of any such proposal.”

A spokesman for Rothschild declined to comment.

Bumi investigation widens to include email hacking allegations

Category : Business

Board of mining investment vehicle founded by Nat Rothschild asks lawyers to look at claims aired by whistleblower

Bumi, the mining investment vehicle founded by Nat Rothschild, has widened its internal investigation into alleged financial impropriety to include possible email hacking and the origin of a whistleblower’s report that first revealed the crisis at the FTSE-250 firm.

The board has asked its lawyers Macfarlanes to examine allegations of email snooping as part of its brief to investigate claims made in a dossier sent to a non-executive director last month – which plunged the company into crisis and resulted in Rothschild’s resignation from the board.

One source close to the board said: “You’ve seen the allegations [made by Rothschild's estranged Indonesian partners, the Bakrie family] that certain email systems have been hacked … [the whistleblower's report is also] part of what the investigation is about in terms of the provenance of this information, whether it’s accurate and indeed whether it’s legal. It is being investigated where this information came from as it was put in the lap of one independent non-exec.”

The news of the widening inquiry comes after the company publicly split into factions that are furiously slinging accusations at each other.

Last week Bumi’s Indonesian backers stoked tensions by alleging “phones and emails had been hacked”, while Bumi’s chairman, Samin Tan, subsequently claimed Rothschild had suggested that he had “access to, and has been reading, [Tan's] emails”. Rothschild denies having access to Tan’s emails or any involvement in the whistleblower’s report. Following Tan’s claims, Rothschild immediately issued his own statement. His spokesman said: “The allegations are untrue and defamatory.”

The latest details of the spat came as Bumi responded to criticisms from Rothschild by saying it would not recommend an offer to carve up the group until the Macfarlanes inquiry is near completion, which is not expected until next month.

It also came as the Financial Times reported that Tan had said he was “aware of various allegations of financial irregularities at Bumi plc’s Indonesian businesses a year before the London group launched its investigation last month”.

Tan invested about $1bn (£620m) buying half the Bakrie family’s Bumi stake last October, despite learning during due diligence of the some of the issues now being investigated by McFarlanes. A Bumi spokesman declined to respond to why its chairman had not launched an investigation before now.

The crisis kicked off last month when Bumi’s shares crashed by a quarter in a single day after the mining investor hired Macfarlanes to investigate allegations of financial dishonesty at its main affiliate, one of Indonesia’s biggest coal producers.

The news was followed by an offer from Rothschild’s original partners in the Bumi float, the Bakrie family, to sever their tie-up by paying $1.29bn cash in return for Bumi’s mines plus cancelling the family’s own shares in the London-listed investment vehicle. The Indonesians also spiced up their proposal with a separate suggestion that Rothschild should give up a stake in Bumi worth upwards of £40m.

Rothschild opposed all aspects of the offer and followed that stance by announcing his resignation from the Bumi board on Monday – although it later emerged that both Tan and the company’s non-executive, the former British diplomat Lord Renwick, had threatened to quit if Rothschild chose to stay.

Rothschild led the London flotation of Bumi two years ago, when it was known as Vallar and the shares began trading at £10 each. It started life as a £700m cash shell intended to make acquisitions in the mining industry and was renamed Bumi after taking a 29% stake in the mining business controlled by the Bakrie family. The shares closed up slightly at 254.39p.

If the Bakries’ proposals to break up the company are accepted, it would leave Bumi as a cash shell again, in which case analysts expect the firm would be wound up. Such an outcome would crystallise a large loss to original shareholders, although it would represent an improvement on their position at the end of last month when the shares languished below 150p.

Bumi row: Rothschild quits board

Category : Business, World News

Nathaniel Rothschild, co-founder of coal mining giant Bumi, quits the firm’s board amid a row with Indonesia’s influential Bakrie family.

Go here to read the rest: Bumi row: Rothschild quits board

Post to Twitter

Nat Rothschild to fight offer to sever ties over Bumi

Category : Business

Scion of banking family is understood to believe that Bakrie family’s proposals are attempt to circumvent takeover rules

London financier Nat Rothschild is preparing to increase tensions with Indonesia’s powerful and controversial Bakrie family by fighting a proposal to sever their embittered tie-up at Bumi plc, the London-listed mining investment vehicle they co-founded two years ago.

It is understood that the scion of the banking family believes a deal proposed by the Bakries is an attempt to acquire Bumi’s assets on the cheap – a view which emerged after a day in which the proposal caused Bumi’s flagging share price to jump by 40% on hopes of a settlement.

After months of feuding, the politically-connected Indonesian mining family said it would offer $1.29bn of cash in return for Bumi plc’s mines and for cancelling its own shares in the London-listed investment vehicle.

The Indonesians also spiced up their proposal with a separate suggestion that Rothschild should give up a stake in Bumi plc worth upwards of £40m. The announcement came after the London-listed group launched an inquiry last month into allegations of wrongdoing at its Indonesian coalmining operations, including PT Bumi Resources, one of the Bakries’ most prized holdings in which Bumi plc holds a 29% stake.

Shares in Bumi plc, which have crashed since floating at £10, gained more than 40% on the news to 261.55p, suggesting shareholders would welcome selling out at less disastrous terms than feared.

One major investor told Reuters: “We are disappointed because there are some absolutely fantastic assets in Indonesia. The current proposal, if the Bakries have the money to go through with it, would lead to potential return of just under £5 a share. That is a disappointing outcome, but it is not as catastrophic as it was.”

However, despite the share price leap, Rothschild is understood to believe that the announcement is a cynical tactic by the Bakries, who have hired Ian Hannam, the banker who suggested the original deal to Rothschild, as their main adviser. The British financier is understood to be telling his inner circle that the Bakries’ proposal would circumvent takeover rules as Bumi plc shareholders Rosan Roeslani, who holds 13%, and Samin Tan, an Indonesian billionaire who pulled the highly indebted Bakries back from default last year with a $1bn investment, have close ties to the Bakries. Tan, however, is said by many to have fallen out with the family.

In an official statement, Rothschild said: “Even if the Bakries exit, one of the key concerns that I share with other minority investors is that Bumi plc would still face a concentration of ownership by a small number of closely-related parties and such challenges would remain.”

A deal is not agreed. Bumi plc said it was consulting shareholders before making any decisions, while analysts questioned how positive shareholders would eventually be.

The Bakries’ complex proposal involves the family cancelling its stake in Bumi plc in exchange for buying back the London-listed vehicle’s stake in the family’s mine. The Bakrie family could then buy Bumi plc’s entire 84.7% stake in another Indonesian coal asset, Berau, for $946m.

David Butler, a mining analyst with Barclays, said: “I think it is highly unlikely that it will go through in all phases, as shareholders will want to retain exposure to coal. But I can see the sense in the first two steps if the Bakries’ influence [in Bumi plc] is removed.”

In 2010 Rothschild listed a cash shell called Vallar – which was then renamed Bumi plc after its most important asset – to acquire mining assets in emerging markets. His sales pitch to investors was that he would bring western standards of corporate governance to otherwise risky investments. However, the weakness in his argument – that Bumi plc did not hold a controlling stake in its most important asset – was very quickly exposed and the relationship between Rothschild and the Bakries became irreparably soured.

If the Bakries’ proposals are accepted, it would leave Bumi plc as a shell with no assets other than $1.29bn in cash. Analysts said the cash would then probably be returned to shareholders and Bumi plc wound up.

Mining firm Bumi accused of human rights abuses

Category : Business

Indonesian miner founded by Nat Rothschild faces allegations of polluting coral reefs and mistreating workers at heated AGM

Indonesian mining company Bumi, founded by financier Nat Rothschild, was on Thursday accused of human rights abuses at a heated annual general meeting.

Campaigning shareholders raised concerns over the alleged dumping of coal and chemicals into coral reefs, the mistreatment of workers and the company’s lack of transparency.

But they were left disappointed after the board, which had co-chairman and biggest shareholder Indra Bakrie missing from the meeting, accused the representatives of “grandstanding” and “ranting”.

After the meeting the campaigners, who go to around 20 mining AGMs a year, said Bumi’s was one of the most poorly organised and least transparent they have attended. It lasted just 42 minutes.

Rothschild recently called on the company’s chief executive, Ari Hudaya, for a “radical clean up” of the firm’s complex ownership structure which involves some of the biggest businessmen in Indonesia.

During the AGM in London – the first time the FTSE-listed firm has held the shareholder meeting in the UK – Roger Moody from Nostromo Research was accused of “ranting” by the company’s senior non-executive, Sir Julian Horn-Smith.

Moody raised concerns over the company’s transparency but, in heated exchanges, he was told by Horn-Smith: “I will not be lectured to about human rights but will hear specific substantive points that you feel should be investigated.

“These are important questions, by the way, so don’t misunderstand me because I’m not being dismissive, but let’s do it in a way where we can engage and do something about it and address the points, rather than grandstanding.”

He added: “I think you have come here with a policy of not wishing to engage with us. If you wish to engage with me I am happy to engage with you and any other shareholder who has a matter of such seriousness. We are not here to have a debate about human rights that will go on for several hours.”

Chairman Samin Tan added: “The transparency is exactly why we are here. Things cannot be changed overnight.”

Andrew Hickman, from Down to Earth, raised concerns over recent reports of coal and chemicals being dumped in a coral reef in Indonesia by the company.

He said: “This happened at various times and we’d like to know what is the credibility of the company if that is allowed to happen?”

Graciela Romero from War on Want added: “I understand from March 2011 there were workers who were mistreated after striking in order to have collective bargaining.”

But the board said it was the first they had heard of the allegations and therefore could not respond immediately and would be happy to meet to discuss them in private.

After the meeting Hickman said: “I am quite shocked. The fact Bakrie doesn’t take the time to come here is disgraceful. You’d have thought he would have faced up to the questions.”

Richard Solley, from the London Mining Network,said: “The AGM was unique for its level of discourtesy and obfuscation. I’ve been to many mining AGMs and the thought that they would not have an answer to our questions is ridiculous. Bumi’s refusal is unacceptable.

To suggest they don’t know about the issues we raised, despite press reports and mentions in parliament, is ridiculous.”

The company, which floated in 2010, had started trading at £10 a share and raised $1.1bn. On Thursday it closed at £3.15.

It was set up through a cash shell launched by Rothschild to fund acquisitions in the mining industry, but has been criticised for its complicated structure which involved the Bakrie family.

It led to Rothschild writing to the chief executive last year calling for reforms of its balance sheet.

But rather than take the advice, the board instead attempted to oust Rothschild as co-chairman. In the end the financier stepped down as co-chair, but maintains a position on the board.

At Thursday’s meeting he sat at the far end of the long table laid out for the board at the Insititute of Directors and afterwards declined to discuss his previous misgivings. He said: “It would be inappropriate for me to comment.”

A spokesman for company said: “We listened to the points raised and will be happy to engage.” He added that Bakrie was unable to attend the proceedings because of other business commitments in the Far East.