BUMI's operations, Indonesia.

BUMI's operations, Indonesia.

Bumi's Board Survives Bitter Protest Vote

Issue 31, February 2013

Shareholders in London-listed coal miner Bumi plc have narrowly voted in favour of retaining the majority of the company’s board, fending off financier Nathaniel Rothschild’s bloody attempt to instate new management.

Just two of Bumi’s fourteen directors, twelve of whom were thrown to a vote today, failed to cross the 50 per cent threshold. Of Rothschild’s candidates only Sir Richard Gozney, Britain’s former ambassador to Indonesia, will join the board.

Of all motions, chief executive Nick von Schirnding and director Sir Julian Horn-Smith received the strongest support, winning 61 per cent approval each. Leaving the meeting in London, Nat Rothschild said that Schirnding, who he has previously described as a PR man, “couldn’t operate a tobacco kiosk, let alone a coal mine.”

This morning Rothschild admitted that his chances of toppling the board had been dealt a severe blow by the sale earlier this week of 24m shares by Indonesian investor Rosan Roeslani, circumventing UK takeover rules that would have nullified pro-board votes.

“Its highly unlikely that we will succeed in getting all or our representatives onto the board,” Rothschild said, predicting an “overwhelming protest” by minority shareholders, such that the incumbent board “lacks a mandate to continue in its current form.” The company’s surviving board said after the vote that Samin Tan will resign as chairman, remaining on the board as “Bumi’s committed business partner in Indonesia.”

Rothschild had appeared to gain increasing momentum in his rebellious bid, winning a disparate base of shareholder support, including Artemis, Schroders and the Abu Dhabi Investment Council. Mining madcap Robert Friedland had also pledged $50m to turnaround efforts.

Subject to fraud investigations that could add more drama to Bumi’s short history, the vote appears to narrowly endorse the board’s intent to dispose of its stake in Indonesia’s Bumi Resources. The entire episode has “made Indonesia look like a hostile place to do business,” said the Jakarta Post.

Bumi plc’s shares rose strongly in London as voting began against a falling market, closing on Thursday up 3.2 per cent at £3.91, prior to results being announced.

“He couldn’t operate a tobacco kiosk.”
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