Bumi board spats escalate

Financier Nat Rothschild has abruptly resigned from the board of Bumi, the coal mining group he helped create and float last year. He objected to a plan whereby the Bakrie family, 29% owners of Bumi subsidiary Bumi Resources, would end their association with the struggling group by buying Bumi's assets.

Rothschild said this was unacceptable while an investigation into possible financial shenanigans at Bumi Resources continued.

The plot thickened when it emerged that Bumi chairman Samin Tan, a Bakrie associate, had previously threatened to quit unless Rothschild left. Tan said Rothschild had been persistently disruptive. Ever since Bumi floated in early 2011 it has been rocked by governance problems, spats and the ebbing raw materials boom.

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What the commentators said

"Just when you thought the Bumi saga couldn't become more complicated and acrimonious", this happens, said Nils Pratley in The Guardian. The sceptics have been proved right, said Rob Davies in the Daily Mail. Bumi "was a business the City knew little about, controlled by business men... not famed for... transparent corporate culture".

The worry was that Bumi was benefiting from London's prestige "without taking [its] supposed governance standards to heart".

Now "the experiment has gone awry". The Bakries, with whom Rothschild fell out, are trying to wrest back control. What sticks in the craw, said Pratley, is that Rothschild appears to be trying to distance himself from the disaster. He has pledged, for instance, to stick up for independent investors and expressed regret that he was "party" to bringing the Bakries to London.

Yet his role was crucial. He raised money to create a cash shell, and then did the coal deal with the Bakries. He "got mugged" by them, said Alistair Osborne in The Daily Telegraph. Now that he's lost 75% of his investors' money, it's a bit late to quit the board to fight for small investors. Rothschild "loves Indonesia" perhaps the Bakries "weren't in the Lonely Planet"?