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Civil strife escalates at Bumi

Financier Nat Rothschild faces fresh setbacks as he attempts to regain control of Bumi, the London-listed coal venture he created in 2010 in a doomed $3 billion (€2.25 billion) deal with Indonesia’s Bakrie family.
Financier Nat Rothschild’s faces fresh setbacks at family-controlled Bumi

Financier Nat Rothschild faces fresh setbacks as he attempts to regain control of Bumi, the London-listed coal venture he created in 2010 in a doomed $3 billion (€2.25 billion) deal with Indonesia’s Bakrie family.

On 17 January the Bumi board will be presented with the findings of the Macfarlanes report into $2 billion of alleged “financial irregularities” at the company. Rothschild initially backed the report, saying it would scrutinise the Bakrie-controlled side of the operation, but has now denounced its credibility following leaks suggesting it will actually serve to incriminate him.

It is expected law firm Macfarlanes will claim the financier failed to cooperate fully with its investigation: providing an unsatisfactory account of the provenance of material given to him by a whistleblower. It is also believed the report will exonerate Bumi chairman Samin Tan, who Rothschild has repeatedly accused of failing to investigate missing funds.

The allegations may prove damaging to the scion of the banking dynasty, who is hoping to reestablish his control of the coal-mining group. On 7 January Rothschild called an extraordinary general meeting to propose the disposition of 12 out of 14 board members. In a show of confidence on 14 January he also spent £16 million (€19.2 million) on Bumi shares, raising his voting stake from 14.8% to 18.2%.

Rothschild dismissed the claims of the Macfarlane report and called for a fresh enquiry. He said he would write to Bumi’s senior independent director, Sir Julian Horne Smith, asking for an independent review to be managed by a retired high court judge.

Rothschild has also been caught up in a row with Bumi over the use of his private jet.

Documents allegedly seen by the Daily Telegraph report that Rothschild invoiced Bumi £4.36 million (€5.23 million) for international flights made in 2010 and 2011.

Lord Renwick, the non-executive director who chairs Bumi’s audit committee, told the Daily Telegraph: “It was argued by the audit committee that, as Nat had to race around the world, he could use the private jet for that purpose. However, later it became a lifestyle choice. He was using it when it was not operationally necessary.”

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