Wealth Manager - Essential news for investment professionals

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Board hits back at Rothschild in Bumi spat

Board hits back at Rothschild in Bumi spat

The board of scandal hit Bumi has said Nat Rothschild must shoulder some of the blame for the position it has found itself in.

Just a day after it emerged Rothschild had emailed one of Bumi's senior independent directors to consider quitting his post in light of the firm's 'placatory' response to allegations of financial irregularity, Bumi issued its own statement and used it to hit back at the financier who holds 15% of the company's vote.

'Nat Rothschild must take a significant amount of responsibility for the situation in which the company finds itself.  He was instrumental in identifying the targets and creating the structure of the original acquisition by Vallar Plc of its stakes in Bumi Resources and Berau and it was Nat Rothschild's entity, Vallar Advisers LP, which acted as the principal adviser on that transaction,' Bumi argued.

The company confirmed it received a letter from NR Investments, a vehicle controlled by Rothschild, to requisition a general meeting of Bumi to remove 12 of its 14 directors.

Rothschild, who quit his non-executive role at the resources firm last year, said he wants to see new board members appointed and a more suitable response to the allegations against it.

While Bumi said it takes the claims seriously, it pointed out the gains Rothschild had made from his creation of the London-listed firm with Indonesia's Bakrie family roughly two years ago.

As a result of the transaction, Bumi said Rothschild received shares equal to around 6% of the company's issued share capital, which at the time were worth more than £100 million, and Vallar Advisers LP also received fees.
             
It added: 'Nat Rothschild's ongoing actions with regard to the company are serving only to distract and delay the board and management further from executing its plan to address the company's issues and maximise shareholder value.'

However Nick von Schirnding, Bumi's chief executive officer, acknowledged that by calling the general meeting shareholders were offered a 'clear choice' between the board and its strategy of separation from the Bakrie Group - a proposal approved unanimously by the independent directors - and Nat Rothschild and his associates' strategy.

The spat between Rothschild and Bumi has seen some high profile investors take action - BlackRock's Evy Hambro sold down his position in the company after Rothschild left the board, and speaking to Wealth Manager last year Schroders' Richard Buxton said the scheme by the Bakries to sell down their position at t a profit was not acceptable.

‘Them attempting to buy it all back as coal prices are significantly lower [than] before the deal was done is not acceptable,' said Buxton, who at the time owned 2% of the firm.

Buxton has continued to back Rothschild's plight over Bumi and yesterday told the Financial Times the 'change of personnel Nat is suggesting would be hugely constructive.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Related Fund Managers

Richard Buxton
Richard Buxton
45/155 in Equity - UK (All Companies) (Performance over 3 years) Average Total Return: 58.77%
Evy Hambro
Evy Hambro
12/13 in Equity - Natural Resources (Performance over 3 years) Average Total Return: -38.62%
Citywire TV
Play Sarasin’s Boucher: why I like salmon with chocolate

Sarasin’s Boucher: why I like salmon with chocolate

Henry Boucher, manager of the £129 million Sarasin Food & Agriculture Opportunities fund, explains why he is gobbling up salmon and chocolate stocks.

Play Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Libby Ashby and leading wealth managers analyse what the Alibaba IPO hype means for Chinese equities, slowing growth of the UK economy and whether there’s anything left to play for in the European sovereign bond market.

Play Tesco, Japan and the rise of the central banker

Tesco, Japan and the rise of the central banker

 Libby Ashby and leading wealth managers scrutinise the food retail sector, Japan’s consumption tax hike and political risk in the markets.

Your Business: Cover Star Club

Veteran banker boosts Sanlam’s stockbroking team

Veteran banker boosts Sanlam’s stockbroking team

A veteran private banker has been recruited by Sanlam Private Investments to strengthen its advisory stockbroking team.

Wealth Manager on Twitter