Rothschild's departure will make Bumi's board stronger, says Bakrie

LONDON (ShareCast) - Indonesian businessman Samin Tan and the Bakrie family, who together control 29.9% of the votes in Bumi, last Friday demanded a meeting to persuade fellow shareholders to vote on a shake-up of the board. More specifically, they wish to ouster the company´s chief executive, Ari Hudaya, its chief financial officer, Andrew Beckham, and three non-executive directors as well as Mr.Rothschild, the company´s co-chairman. The proposed changes to Bumi's board of directors is "purely" about making the board as strong and manageable as possible, according to Chris Fong, a spokesman at the Bakrie Group, a Bumi shareholder. The ousting of key members is aimed at strengthening the company's board with a dedicated Chief Executive Officer and Chief Financial Officer (CFO) based in London, Fong said in an email on Monday, according to Bloomberg. According to the Financial Times, a person close to the company has spoken out to say that Tan should have approached the board before making his demands, adding that there was never a need to call for a shareholder vote. That same source added that most of the proposals made by Mr.Tan and the Bakries were uncontroversial, although the ouster of Rothschild, who in the past had been highly critical of both Mr.Hudaya as well as of PT Bumi´s corporate culture, was more contentious. Scott Merrillees, who is set to become CFO if the current CFO is ejected from the boardroom, has for his part been quoted as saying: "we made a billion-dollar investment and we want to get to work. We want a harmonious, cohesive board that is good at developing assets." Bumi's shares took a hit today, falling 14.47% to 727.00p by 13:12, with a downgrade from Nomura not helping. The broker cut its recommendation on the stock from buy to neutral this morning, citing corporate governance risk: "a prolonged corporate governance dispute could frustrate the group's growth and refinancing goals," analysts said.