Indonesia's Bakries slam Rothschild Bumi resignation

Yahoo, AFP, 16 October 2012

Indonesia's powerful Bakrie family hit out at British tycoon Nathaniel Rothschild Tuesday after he resigned from the board of Bumi Plc, saying he was a "threat to all shareholders" of the mining firm.

In the latest saga of a row analysts say has attracted the attention of possible foreign investors in Indonesia, the Bakries said Rothschild should have quit earlier to avoid Bumi Plc's stock price from plunging.

"Mr. Rothschild is a threat to all shareholders who are fighting for the best interests of the company, and ultimately for themselves and the investors they represent," Bakrie Group spokesman Chris Fong said.

"There are no winners in this deal anymore, it's pure damage control."

Rothschild's resignation on Monday from Bumi, which he co-founded with the Bakries, came as its board considers a proposal by the Indonesian family to sever their ties with the company and buy its most productive Indonesian mines.

The long-running power struggle has seen the London-listed firm's shares slump more than 70 percent this year.

At the heart of the dispute is a Rothschild-backed probe into alleged financial irregularities at the Bakrie-founded Bumi Resources, Indonesia's largest coal miner, which is part-owned by Bumi Plc.

Bumi Resources is among a string of companies owned by the family of Aburizal Bakrie, one of Indonesia's wealthiest men and a likely candidate in presidential elections in 2014.

The 65-year-old is one of Indonesia's richest men with businesses spanning coal, telecommunications to construction.

But he is a highly divisive figure in Indonesia after one of his companies was linked to the triggering of a mud volcano near a gas drilling site in 2006.

The Bakries have offered to give up their 23.8 percent stake in Bumi and pay about $1.2 billion for its mines, which would leave Bumi Plc with no assets other than the cash from the deal.

In the resignation letter quoted by Dow Jones Newswires, Rothschild stated his vehement opposition to the Bakries' proposal.

He also said chairman Samin Tan appeared "determined to drive through the Bakries' proposal", a move he decried as a "disgrace" without first completing a probe into alleged financial irregularities at Bumi Resources.

The 41-year-old scion of a European banking dynasty also expressed his determination to fight for the company's investors from outside the board and said he regretted helping the Bakrie family list in London.

The offer for the break-up from the Bakries followed an investigation order by the Bumi Plc board in September over "potential financial and other irregularities", including a $637 million writedown of development funds and assets in Bumi Resources.

Rothschild was ousted as co-chair of Bumi Plc in March after calling for a "radical clean-up" of the Indonesian firm.

Analysts say the ugly battle has been carefully watched by potential foreign investors already wary of corruption and a lack of corporate governance in Indonesia.

"It had been hoped that the listing of Bumi Plc in London would create a new ethos," said Keith Loveard of Jakarta based consultancy firm Concord Consulting.

"Regrettably the reverse has occurred," he added.

Nat Rothschild has resigned as a non-executive director

of mining group Bumi. Photograph: Nick Harvey/WireImage

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