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Artemis’ Dodd: Bumi board failures are ‘unacceptable’

Artemis’ Dodd: Bumi board failures are ‘unacceptable’

John Dodd is backing Nathaniel Rothschild’s proposal to replace the majority of the board at Bumi and views its corporate governance failures as ‘unacceptable.’

The Artemis co-founder and manager of the Artemis Alpha trust has pledged his support for Rothschild, who quit the board in October, and his plans to replace 12 of the 14 directors on the board of the mining group.

‘I have followed closely the situation at Bumi. The current board’s relationships make them conflicted,' Dodd said.  

‘I cannot see how they can change that. Furthermore, they now appear to be attempting to blame Nat Rothschild for their own lack of leadership and their failure to address the serious corporate governance concerns that are obvious to everyone. This is unacceptable.’

Dodd added: ‘I trust Nat’s judgment and integrity completely. The team he has assembled is impressive. In my opinion, it offers shareholders the best chance of restoring value at this company.’

However, at the end of January the board of Bumi rejected the bid by Rothschild and his call to overhaul the board.

The firm warned if these board changes occurred, it would cause further shareholder disputes among other issues, and is urging shareholders to vote against Rothchild’s proposals.

It also believes Rothschild’s board would not be able to separate the firm from the Bakrie Group and its 29% stake in Bumi Resources.

Rothschild, who founded Bumi in 2010 in conjunction with the Indonesian Bakrie family, is seeking to install himself as executive director and Conservative MP Jonathan Djangoly as chairman of a new corporate governance committee, according to reports.

He is also proposing Brock Gill as CEO and Wal King as chairman.

The two remaining directors, Sir Graham Hearne and Steven Shapiro, will reportedly resign if Rothschild’s resolutions are given the green light.

Following a fourth quarter update yesterday, in which Bumi said it was 'committed to growing the business and driving shareholder value’, Rothschild reiterated his call for a board overhaul.

‘Bumi needs a new independent management team with the requisite operational expertise,’ Rothschild told the Stock Exchange.

‘In Brock Gill and Wal King, investors have the opportunity to ensure that the Berau operations are run efficiently, free of conflicts of interest and that the expansion delivers long term value for shareholders.’

He added the announcement by Bumi at the end of January that it had strengthened its operational management is further evidence of the current board attempting to ‘mislead’, as Eko Budianto and Tony Redman were already in place.

The vote will occur at Bumi’s general meeting on 21 February.

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