The proposed changes to Bumi's board of directors is "purely" about making the board as strong and manageable as possible, according to Chris Fong, a spokesman at the Bakrie Group, a Bumi shareholder.
The ousting of key members is aimed at strengthening the company's board with a dedicated Chief Executive Officer and Chief Financial Officer (CFO) based in London, Fong said in an email on Monday, according to Bloomberg.
On Friday, it was announced that Nathaniel Rothschild and James Campbell, the founders the Indonesian coal miner, could be cast out if Borneo Bumi Energi & Metal (controlled by PT Borneo and Bakrie & Bros) has its way.
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Samin Tan and Borneo Bumi Energi, which bought up 23.8% of the FTSE 250 miner in December, demanded a meeting to persuade fellow shareholders to vote on a shake-up of the board.
According to the Financial Times, a person close to the company has spoken out to say that Tan should have approached the board before making his demands, adding that there was never a need to call for a shareholder vote.
Scott Merrillees, who is set to become CFO if the current CFO is ejected from the boardroom, has also said: "We made a billion-dollar investment and we want to get to work. We want a harmonious, cohesive board that is good at developing assets."
Bumi's shares took a hit today, falling 14.47% to 727.00p by 13:12, with a downgraded from Nomura not helping. The broker cut its recommendation on the stock from buy to neutral this morning, citing corporate governance risk: "a prolonged corporate governance dispute could frustrate the group's growth and refinancing goals," analysts said.
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