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It now appears that Bumi (LSE:BUMI) is going to be a headliner in London and there is no telling how long the play will go on. Last evening Nat Rothschild, the conceiver and creator of the world of Bumi tendered his resignation to board chairman, Samin Tan.
Having, quite obviously, hoped to pronounce his 2011 creation “good”, he has deemed it to be so corrupted that he is walking away, disassociating and distancing himself from the activities of the board.
In a previous article we reported that the Bumi structure was starting to come apart at the seams as the powerful Indonesian Bakrie family was making overtures indicating that it wanted to back out of the Bumi deal and then reacquire some of the coal mining assets under the umbrella of their own corporate family brand. That would leave Bumi out of the business that it was created for and leave it without assets (other than cash) and no means of income generation.
Meanwhile, Rothschild had already put forth accusations that something was out of order in the company’s Indonesian operations, specifically, potential financial and other irregularities. Rothschild’s resignation letter further clarified his concerns. “Given the scale of the alleged irregularities, as well as other facts not yet in the public domain, it would be a disgrace to proceed with, or even to entertain, the proposal made by the Bakries.”
Rothschild’s concern is at least two-fold, but the story unfolds, much more may be revealed. Rothschild’s first concern developed with six months of the inception of the company when he found it suspicious that the Bakrie family was reluctant to call back a $500 million advance that had been granted to Rosan Roeslani and his company Recapital. As he investigated his suspicions, He uncovered what he suspects is evidence of some sort of collusion between the Bakrie family and Roeslani all through the process of forming the company and thereafter.
Now that the Bakrie family is trying to withdraw its holdings, Rothschild is alleging some kind of additional collusion and skullduggery going on between Mr. Tan and the Balkries. Rothschild has begged the question of why, were the Balkrie offer to be accepted, would Mr. Tan be reimbursed at £10.91 per share whilst private investors would realise only an estimated £4.30 per share. Rothschild submitted that this evidenced yet another backfroom deal intended to benefit only the Balkrie family and those who would help them pull it off.
So it has momentarily come to the point where both sides are pointing their fingers at each other, in particular, each calling the others actions and affront and embarrassment to Indonesia. What we are seeing is just the street fight. The fights in the boardroom and the courtroom will likely be more bloody and will surely gain greater headlines.
