Bumi Battle Just Beginning?

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Nat Rothschild left the Bumi shareholders meeting in London yesterday, 21 February, having lost a major battle, but vowing to fight on.  Nineteen of Rothshild’s 22 proposed resolutions were  rejected by shareholders.  The Bumi share price followed by continuing its year long 60% decline with a 21.3 pence plunge (5.44%) to 370.0 shortly past midday today.

Yesterday’s battle was the culmination of a long series of skirmishes and peace negotiations as Rothschild sought to convince shareholders to unseat 12 of the 14 members of the the Bumi board and make way for himself to resume a position with the company he had helped to create.  Telling reporters after the meeting that “You must not regret the past,” Rothschild accepted defeat, but vowed to fight on from his position as a major shareholder.

Rothschild had been relatively confident that he had garnered enough institutional support to overcome the 11.9% difference between his voting rights and those of the Bakrie family whom he has accused of fiscal irresponsibility.  The Bakrie’s pulled a last minute switcheroo when Rosen Roeslani, a Bakrie supporter with limited voting rights, sold his 10% of the company to other Bakrie supporters, giving the family an instant and unexpected voting advantage.

Although he lost his bid to be reinstated on the board by almost a 2 to 1 margin, he did manage to convince the attendees to unseat Nalinkant Rathod and Jean-Marc Mzrahi and to elect Sir Richard Gozney, former British Amabassado to Indonesia.  Ironically, after surviving the vote to unseat him, Chairman Samin Tan proferred his resignation.  So, in that case at least, Rothschild scored a win that was recorded as a loss.

The company was created with the intent of offering investment opportunities in natural resource assets in emerging markets while at the same time protecting investors by by requiring the company to operate under the standards of UK rules.  Apparently the board has not lost sight of that original intent as it said, regarding Mr. Tan’s departure, that it would be seeking a new chairman “who has experience in and is familiar to, the London market.”  It also subtly implies that Mr. Tan had failed in his tenure to lead the company adequately.

During the meeting Rothschild said “I will remain as a shareholder as long as it takes to get a board which acts for all shareholders and not just some.”  Following the voting results he said, “Whilst the current board may claim a pyrrhic victory, they should be under no illusions that independent shareholders are demanding new leadership and management, an end to looting and corruption at Bumi, and robust and proper action to recover shareholders’ stolen funds.”

A meeting to seek shareholder approval for restructuring the company is expected in April or May.  Will Nat Rothschild be able to win that battle or will it be an exercise in tilting at windmills again?  Stay tuned to ADVFN for more details as the saga continues.

 

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