Indonesian tycoon backs plans to boot Bumi plc board members

An Indonesian magnate is backing a proposal to oust board members of Bumi plc, in one of the dirtiest shareholder battles to hit the London market.

An Indonesian magnate is backing a proposal to oust board members of Bumi plc, in one of the dirtiest shareholder battles to hit the London market.

Hashim Djojohadikusumo has voiced his support for the plan set forth by the company's co-founder Nat Rothschild to replace 12 of Bumi's 14 directors.

Advertisement - Article continues below

Rothschild has called an extraordinary shareholders meeting for Thursday to vote on the proposal.

While Bumi has urged shareholders against the vote, Rothschild has an ally in Djojohadikusumo who late last year agreed to join the financier in his efforts to take control of the troubled company.

Djojohadikusumo told the Financial Times he believes a new board would improve governance following long-running company in-fighting.

If the motion is passed, Djojohadikusumo will become a Non-Executive Director of Bumi and Chairman of subsidiary Berau Coal.

Bumi was formed in 2010 when Indonesia's influential Bakrie family reversed their coal mining assets into Rothschild's London-listed cash shell, Vallar.

Advertisement - Article continues below

However, Rothschild and the Bakrres had a falling out following an investigation into financial wrongdoing.

"He was very indignant at how he had been treated and he wanted to size me up," Djojohadikusumo told the UK newspaper of their business relationship.

"Nat's got a lot of emotional investment in this. But I don't. I'm having fun. And hopefully I can make money too."

Advertisement - Article continues below

The tycoon's involvement adds an interesting turn, as he goes against the Bakries in both business and politics.

His brother Prabowo Subianto will go head to head with Bakrie family patriarch Aburizal Bakrie in the initial stages of Indonesia's presidential election, which will go to the polls in 2014.

Djojohadikusumo will also invest "between tens and hundreds of millions of dollars" in Bumi plc if Rothschild's proposal is successful.

The businessman, whose wealth comes from oil and gas investments in Azerbaijan, Kazakhstan and the US, said the dispute has unfairly "damaged the credibility and good name of many Indonesian public companies" that have been "tarred with the same brush".

The Bakries have said Rothschild's hostile attitude is partly to blame for Bumi's problems.

The family's Bakrie Group has put forth a deal to cancel its indirect 23.8% stake in exchange for Bumi plc's 10.3% holding in Asia's biggest thermal coal exporter Bumi Resources.

Advertisement - Article continues below

Bumi Plc would also sell the remaining 18.9% interest it holds in Bumi Resources to the Bakrie Group for $278m.

However, the Bakries warned they would withdraw the offer if shareholders vote for Rothschild's proposal.

In another twist, Indonesian investor Rosan Roeslani has agreed to sell his 10% stake in Bumi.

The move came after Roeslani landed himself in hot water when the UK's Takeover Panel ruled he was part of a 'concert party' with the Bakrie Group and Sami Tan, another Indonesian investor.

The watchdog, which has been urged by investors to intervene in the Bumi dispute, found that together they owned nearly 58% of the voting power of the company. They were told to cut back to under 30%. Consequently, their voting power at Thursday's meeting has been capped at 29.9%.

However, the parties which bought Roeslani's stake will apparently be able to vote, possibly upsetting those who thought Rothschild's position was unassailable.

Bumi shares fell 4.47% to 378.30p at 12:19 Monday.




Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular


House price crash: UK property prices are falling – so where next?

With UK property prices falling for the first time in eight years, are we about to see a house price crash? John Stepek looks at what’s behind the sli…
2 Jul 2020

How can markets hit new record highs when the economy is in such a mess?

Despite the world being in the midst of a global pandemic, America's Nasdaq stock index just hit an all-time high. And it's not the only index on a bu…
3 Jul 2020

The end of the bond bull market and the return of inflation

Central bank stimulus, surging post-lockdown demand and the end of the 40-year bond bull market. It all points to inflation, says John Stepek. Here’s …
30 Jun 2020