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Today is 31 May 2013. Bumi (LSE:BUMI), the bane of Nat Rothschild’s existence, has, at long last, released its final report for the year ending 31 December 2012. Its share price did absolutely nothing for the 39th consecutive day because trading of Bumi shares was suspended on the London exchange on 22 April for the company’s failure to comply with regulatory requirements for timely financial reporting.
The infighting at Bumi between co-founder, major shareholder and former board member Nat Rothschild and the Bakrie family of Indonesia has been a front-page soap opera for the last year, with Rothschild alleging mismanagement and graft on the part of the Bakries, one of Indonesia’s wealthiest families. Following a major boardroom brouhaha on 21 February of this year, Rothschild pulled no punches when he said that he and other 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.”
Having already said that, it is not at all surprising that Rothschild called this morning’s report “appalling but not surprising” when the report revealed that £130 million in funds is still missing, allegedly spent on activities “with no clear business purpose.” I wish I had Rothschild’s phone number. I’d like to publish it so that all those who accused him (aloud or not) of being a well-born crybaby could call him to apologize. I’m sure that it is difficult to be a whistleblower, but I can’t imagine the burden of being a high-profile one. My hat is off to you, Nat.
But this story is not yet over. In fact, what has transpired so far may be only the beginning, as the Serious Fraud Office leads an effort to recover the missing funds. Whilst Bumi has admitted that £130 million is unaccounted for, Rothschild’s claim all along has been that as much as $1 billion in assets is missing.
The company is on a mission to “overhaul” its systems and controls so that it can “draw a line under the past and move on” according to new CEO Nick von Schirnding. Von Schirnding said that he has an idea when the money went but that he “would rather announce what we can once we’ve got the monies in the bank account.” He also said, “Rest assured I’m not going to leave any stone unturned.” Part of the corporate cleanup will be an attempt to buy out the Bakrie family stake in the company for $278 million in cash, after which Bumi would once again “be well placed to succeed as a leading coal producer focused on the growth markets of Asia.”
Having now filed the report, the company hopes to have its restructuring plans completed and new board members seated at the 26 June shareholders’ meeting. Another major item on the agenda will be the resumption of trading on the LSE.
Bumi reported a $2.4 billion pre-tax loss on revenues of $1.5 billion. Nat Rothschild may not have had the immediate effect that he had hope for, but the aforementioned news makes it apparent that he created the impetus to correct the issues and to get the company back on the right road. Nat must have smiled with satisfaction when he heard von Schirnding say, “I will now start building a reputation for doing the right thing.”
