Nat Rothschild brings Bumi corporate battle to court

http://www.guardian.co.uk/business/2013/jul/18/nat-rothschild-bumi-corporate-battle-court

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Financier Nat Rothschild, co-founder of the troubled Indonesian mining firm Bumi, has sued the company and his one-time partners, taking one of London's messiest corporate battles to court.

Rothschild, who helped set up Bumi almost three years ago, has long opposed the company's current management, and in a petition heard on Thursday argued Bumi was run in a way that hurt, or "unfairly prejudiced", small investors. A claim of "unfair prejudice" is a key legal remedy under UK law available to smaller investors unable to block decisions.

Rothschild and his former Indonesian partners – primarily the influential Bakrie family – have been at odds for more than two years, their relationship souring just months after they struck a deal.

Both sides have lost heavily as the partnership fell apart, amid tumbling thermal coal prices, boardroom battles and allegations of misuse of funds and illegal phone hacking.

According to Thursday's petition, Rothschild will not seek financial compensation with the case, but instead asked a court to scrap "relationship agreements" between the company and the Bakries, and to remove outgoing chairman Samin Tan and Bumi director Alex Ramlie from the board.

Bumi's current board is seeking to turn around the company's fortunes by splitting with the Bakrie family and focusing on majority owned Indonesian subsidiary Berau Coal.

The Bakries have agreed to split with the London firm, in a deal that will see them buy back a 29% stake in Indonesian unit Bumi Resources currently held by Bumi. They will sell their interest in the parent company to their partner, major Bumi shareholder and outgoing chairman Tan, lifting his stake to over 47%.

A spokesman for Bumi said the court proceedings were "an unnecessary distraction and serve no useful purpose".

"The relationship agreements will come to an end and the board will be restructured as part of the separation transaction," he said.

A spokesman for the Bakries said the family was concentrating on the split and the stake purchase "and we hope Mr Rothschild will support that".