By Jesse Riseborough -
Jul 8, 2013 5:37 PM GMT+0700
Nathaniel Rothschild, the financier
who co-founded Bumi Plc, asked the U.K.’s financial regulator to
investigate whether the Indonesian coal producer made misleading
statements about a proposed deal with the Bakrie Group.
Rothschild’s claim centers around Bumi’s delayed plan to
unwind its 29 percent investment in PT Bumi Resources (BUMI) and
separate from co-founders the Bakrie family in a cash-and-share
deal, according to a copy of a July 4 letter sent by
Rothschild’s lawyers to the Financial Conduct Authority and seen
by Bloomberg News. A Bumi spokesman declined to comment.
Rothschild claims Bumi and the Bakrie Group “issued a
series of choreographed announcements which created a misleading
impression as to the terms of the separation,” the letter
shows. They then “relied on the misleading characterization of
the benefits” of the deal to influence shareholders to vote
against resolutions put forward by Rothschild at a February
extraordinary general meeting, it said.
Bumi has been at the center of a battle for control between
co-founders Rothschild, 41, and the Bakries since the $3 billion
deal that brought them together started to sour in late 2011.
Waning coal prices, board infighting and probes in the U.K. and
Indonesia have weighed on the stock, which plunged 69 percent in
London last year. The shares have been suspended from trading
since April.
A deal to separate from the Bakries announced in October,
which results in the Bakries canceling their stake in London-listed Bumi and buying back their holding in PT Bumi, has yet to
be completed. Bumi Chief Executive Officer Nick von Schirnding
said last month the deal was still being worked on and he was
“confident we are nearing the end of this process.”
Thaksin Shinawatra
Former Thai Prime Minister Thaksin Shinawatra is in talks
to buy the Bakrie family’s 23.8 percent stake in Bumi, the
Sunday Times reported yesterday, without saying where it got the
information. A Bumi spokesman declined to comment on the report,
which said Shinawatra had hired UBS AG to advise him.
The Bakries have the full amount of funds available to
complete the deal and were waiting to hear from the board of
Bumi on “how they wish to proceed,” according to a statement
last month. A London-based spokesman for the Bakrie Group
declined to comment today.
According to the letter to the U.K.’s FCA, Rothschild is
concerned a $50 million payment from the Bakries held in escrow
will be returned should they withdraw from the deal. In the week
leading up to the February shareholder meeting, at which
Rothschild sought to remove 12 of the 14 directors, the CEO and
Chairman Samin Tan confirmed the terms of the Bakrie deal were
fixed, according to the letter.
Invites Probe
“The question therefore arises whether false or misleading
statements have been made to the market,” Rothschild’s lawyers
wrote, adding that their client invites the FCA to investigate.
The creation of Bumi brought together Rothschild and the
Bakries, a family-owned palm oil-to-property empire founded in
Sumatra in 1942. Bumi and the Bakries announced a deal to unwind
their investment in October that involved the Bakries exchanging
their 23.8 percent of Bumi Plc (BUMI) for 29.2 percent of Bumi
Resources in a cash-and-share-swap deal, leaving Bumi Plc in
control of Berau Coal.
Rothschild left the board of Bumi in October, saying he’d
lost confidence in its ability and vowing to fight “from
outside the tent.” He retains a stake of about 15 percent,
according to data compiled by Bloomberg.
To contact the reporter on this story:
Jesse Riseborough in London at
jriseborough@bloomberg.net
