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Bombshell Dropped at Bumi Annual Shareholder Meeting : $ 173 Million of Missing Funds To be Returned

AX065_794B_9  nat rothchildNathaniel Rothschild/ Bloomberg

/ By Clive Minchom /

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We reported this morning on Nathaniel Rothschild’s low-keyed approach to voting for directors being taken in advance of today’s Annual General Meeting in London of Indonesian coal mining company Bumi Plc, listed on the London Exchange. Reuters now reports that at the meeting Bumi told its investors gathered in attendance that one-time shareholder, former board director and ex-CEO of Bumi mining subsidiary Berau, Rosan Roeslani, would transfer cash and assets to the agreed value of $173 million, in exchange for Bumi agreeing to drop legal claims against him. This represents most of the US$201 million it said last month had been lost at the unit.

Bumi shareholders will be asked to approve the deal when they vote on a split from the Bakrie family in coming months – Bumi has wanted to overhaul the company by parting ways with the Bakrie family for some time, for which there is an agreement on the table, and to concentrate on its remaining, 85-percent-owned, mining subsidiary Berau.

Bumi was co-founded by financier Nathaniel Rothschild and Indonesia’s influential Bakrie family together, but has struggled in the past two years to overcome bitter boardroom battles, a probe into financial irregularities and as well the falling price of coal during recessionary business conditions. A deal to recover cash lost at Berau is a key step in advance of the splitting off of the Bakrie interest in the company, in return for it receiving bumi’s second mining subsidiary, also called Bumi, and cash. Crucially a return to share trading after a two-month suspension that was ordered when the misappropriation of funds was discovered is now imminently expected as well.

Rosan Roeslani himself has made no admission of wrongdoing or liability in respect of the claims, Bumi said. The remaining $28 million that is still missing, the company said, related to cash pre-dating the deal to fold Berau into investment vehicle Vallar, which then became Bumi Plc at the time of the listing.

“There can be no separation without a recovery of the money, ” Bumi’s outgoing chairman Samin Tan said, adding negotiations were held back in recent months by the executive team’s focus on the audit of Berau and the need to restart share trading – suspended after its annual results had been delayed because of the irregularities.

Bumi is now in talks with Britain’s financial markets regulator to allow its shares to resume trading. Nathaniel Rothschild, whose relationship with his Indonesian partners soured quickly after Bumi’s listing in London, which he had a good deal to do with in terms of providing confidence to investors, said on Wednesday that any cash not returned by Roeslani, a board director until December, should be reflected in the price of the split with the Bakries.

Britain’s regulators and prosecutors, he said, “need to be all over this situation, bringing those responsible to justice”. He himself can feel personally vindicated by this turn of events, as he has been all over his former Indonesian partners to put the money back, and eject the Bakrie interests, in the name of sound governance.



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