Financier Nat Rothschild. Photograph: Jack Guez/AFP/Getty ImagesThe increasingly vicious spat between the financier Nat Rothschild and his Indonesian mining partners took another twist on Wednesday night after the company was strongly criticised by the Takeover Panel and the warring parties again turned on each other.The corporate takeover regulator said it was launching an investigation into why Bumi plc, the Rothschild creation that holds stakes in a pair of Indonesian mining ventures, had not disclosed a relationship between two of its major shareholders. The panel said it now views those shareholders – Indonesia’s influential Bakrie family and another Indonesian investor, Rosan Roeslani – as acting together, and restricted the voting rights on their combined 57% stake to 29.9%.The panel said it was “undertaking an investigation into why it was not previously made aware of the existence of the concert party, and why a … waiver was not sought in relation to the transactions”. Under the takeover code, any person – or persons acting in concert – owning a stake of 30% or more in a company must launch a bid for the whole business, unless the panel approves a waiver.Bumi plc was created from the flotation of the cash shell Vallar in 2010, which raised £707m to spend on acquiring international mining groups. It subsequently bought 25% of PT Bumi Resources from the Bakries, plus a 75% interest in PT Berau Coal Energy from Roeslani’s company, PT Bukit Mutiara. The Indonesians were issued with new shares in Vallar, which was then renamed Bumi plc.In a statement, the Bakries said they had now made a formal complaint against Rothschild, blaming him for the failure to disclose the relationship. “Had the Takeover Panel been made adequately aware of the facts in November 2010 and ruled that there was a concert party, as it has now, we would certainly have sought a waiver,” the family’s Long Haul Holdings said.Bumi plc also attempted to blame its co-creator, Rothschild, saying it wished “to remind shareholders” that Rothschild had brought the flotation to shareholders, had received about 14m shares as a reward for delivering the two acquisitions and had served as a non-executive director from the firm’s creation until he stepped down from the board in October.A spokesman for Rothschild said: “Vallar’s board, chaired at the time by Sir Julian Horn-Smith, approved the acquisition in November 2010, on the basis of advice from its legal and financial advisers, who led all interactions with the Takeover Panel on behalf of the Vallar board. At the time of the transaction, Vallar’s board was not aware and was not made aware of any concert party issues – indeed in the [share purchase agreement] Bakrie Bros, Long Haul and Recapital [where Roeslani is chairman] warranted to the plc they were not concert parties. The Takeover Panel ruling clearly indicates the sellers breached their warranties to the plc.”When he created Vallar, Rothschild’s sales pitch involved combining western standards of corporate governance with emerging market levels of investment return.However, he quickly fell out with the Bakries over corporate governance at the firm, and the spat exploded in the autumn after shares in Bumi crashed by a quarter on a single day when the company hired the law firm McFarlanes to investigate allegations of financial dishonesty Bumi’s main investment. The law firm is yet to report.
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