* Rothschild steps down with immediate effect
* Says proceeding with Bakrie split offer would be
"disgrace"
* Bumi Plc says board still considering Bakrie offer
LONDON, Oct 15 (Reuters) - Financier Nat Rothschild has
resigned from the board of Bumi Plc, the coal mining
group he co-founded two years ago, attacking his partners and
directors as they consider unravelling the Indonesian venture.
Rothschild's resignation comes as the board of the
London-listed firm miner is looking at a $1.38 billion proposal
from Indonesia's influential Bakrie family, who co-founded the
venture with Rothschild, to exit their stake and take back the
firm's operating assets.
The offer last week followed an announcement by Bumi of
allegations of wrongdoing at some of those Indonesian operations
- including part-owned Bumi Resources - that sparked
an independent investigation and heightened already strained
relations between Bumi shareholders.
Bumi Plc is looking into potential irregularities in more
than $500 million of funds at its Indonesian subsidiaries.
Rothschild's departure follows months of troubled relations
between Bumi investors, as they watched their shares tumble to a
fraction of the price at which it listed in June last year.
Rothschild's call last year for a "radical clean-up", in a
letter leaked to newspapers, saw him ousted as co-chairman, and
tensions had also risen between Tan, who invested $1 billion to
bail out the Bakrie family, and the Bakries themselves.
"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," Rothschild
said in a letter announcing his resignation from the board to
Bumi chairman and major investor Samin Tan.
"I believe that this proposal is so obviously not in the
interests of minority shareholders that I find it impossible to
stay on as a director. I am afraid that I have lost confidence
in the ability of the (Bumi) Plc board to stand up for
investors."
Rothschild said Tan, who holds a 23.8 percent stake in Bumi
through a partnership with the Bakries, was complicit in the
oppression of minority shareholders. Rothschild, who himself
holds almost 12 percent in Bumi, also accused Tan and the
Bakries of damaging Indonesia's reputation.
According to a weekend email seen by Reuters, Tan told the
Bumi Plc board he would resign as chairman unless Rothschild was
removed. Tan was supported by an independent non-executive
director, former British diplomat Robin Renwick, who threatened
to step down in a separate email also seen by Reuters.
In his email, coal tycoon Tan accused Rothschild of
"persistent disruptive" behaviour.
A spokesman for Rothschild said the comments on Tan were
made on the basis of preliminary findings of the independent
probe into the alleged irregularities in Indonesia, seen by the
board last week.
Renwick, for his part, said Rothschild had shown a "complete
disregard for the principle of collective responsibility".
"What a disappointment Mr Nat Rothschild has been to us and
all shareholders," said Christopher Fong, Bakrie Group Senior
Vice President. "This man has a lot to answer for, and now he
has the audacity to say we have disgraced Indonesia."
Fong repeated the Bakries' call for Rothschild to return all
shares and other benefits received as commission for the venture
now being taken apart.
Tan could not be reached for comment and Renwick did not
respond to a telephone call.
MINORITY SHAREHOLDERS
Rothschild said in Monday's letter that Tan, who borrowed
heavily to fund his rescue of the Bakries, was not acting in the
interests of minority shareholders in Bumi Plc and would receive
more favourable treatment than smaller investors if the plan to
dismantle the group went ahead.
He said Tan, as a partner of the Bakries, would be
reimbursed for his $1 billion, debt-funded investment at 10.91
pounds a share, against 4.30 pounds a share for other investors.
The company's stock is currently trading at 2.45 pounds.
Tan said last week he expected to recover the amount
initially invested but he did not give specific financial
details of the kind mentioned by Rothschild.
Bumi said its directors, which have appointed investment
bank Rothschilds to do due diligence on the Bakrie proposal,
were "unanimous" that a solution should be considered on a
separation, after "irreconcilable differences" between the
miner's founders.
"But they have not formed a view on value," Nick von
Schirnding, Head of Corporate Affairs at Bumi Plc, said.
The probe on potential financial irregularities is due to
conclude in the coming weeks.
