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Schroders’ Buxton backs Rothschild in Bumi clash

Richard Buxton 480

Schroders head of UK equities Richard Buxton has backed financier Nat Rothschild in his ongoing clash with coal miner Bumi plc.

Rothschild is attempting to replace 12 of the 14 directors on the board of the coal miner and has received backing from Buxton.

Schroders is one of the largest City of London shareholders in Bumi, with about 4.2 per cent of the firm.

According to the FT, the support from Buxton will be crucial for Rothshcild – who helped create the company in 2010 – attempts to win support from London’s financial institutions in his battle with Bumi plc’s directors and its Indonesian shareholders.

Buxton told the Financial Times on Monday: “I have no issue with being supportive of an effort to achieve a divorce with the Bakries on terms that also introduces new management and directors to move the business forward.”

“The change of personnel Nat is suggesting would be hugely constructive.”

Bumi plc owns 29 per cent of Bumi Resources and 85 per cent of Berau, another Indonesian coal miner.

Rothschild, who has a voting stake of about 12 per cent, also wants to see the relationship with the Bakries ended but has made a counterproposal to raise fresh funds to buy out Bumi plc’s other Indonesian shareholders, including chairman Samin Tan.

Bumi plc has announced plans to organise a meeting in February to respond to Rothschild’s proposals and will offer shareholders a clear choice.

Rothschild has questioned the independence of the current board members and suggested the board had “failed in its duties to minority shareholders”. He also said the board did not appear to have “appropriately acted” on the findings of a report into alleged financial irregularities at its Indonesian businesses.

The board of Bumi says it has taken Rothschild’s allegations seriously but added that he also had a role in Bumi’s current problems.

Bumi plc senior independent director Sir Julian Horn Smith says: “As a board we have been working extremely hard to solve the various highly complicated and challenging governance, operational and legal issues at the company and to maximise value for shareholders. All of these issues essentially derive from the original deal that Nat Rothschild was instrumental in putting together.”

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