LONDON (ShareCast) - Bumi plc on Wednesday accused co-founder Nathanial Rothschild of misleading shareholders in his bid to take control of the company's board.
The coal mining firm retaliated to a letter Rothschild issued to shareholders outlining his strategy for the company, as the entrepreneur continues to bang heads with members of the board.
The company is set to hold a meeting on February 21st to vote on Rothchild's proposal to replace 12 of the 14 Bumi plc directors. It comes amid his ongoing battle with Bumi Plc's co-founders, Indonesia's influential Bakrie family.
Bumi plc said Rothschild's latest recommendation goes against the company's need to separate from the Bakrie Group and Bumi Resources, in which it holds a 29% stake.
The proposed transaction is currently valued at more than $580m to shareholders through the cancellation of Bakrie's 23.8% stake in Bumi plc, and the disposal of Bumi Resources.
"Rather than effecting a separation, Rothschild wants to try to assert 'influence and stewardship' in relation to Bumi Resources. This is naïve in the extreme," the company said in a statement to shareholders.
"The last two years have clearly demonstrated that a 29% shareholder [in particular one with Mr. Rothschild on the board] cannot adequately influence, let alone control, Bumi Resources."
The group said Rothschild made sweeping statements about maximising value to repair Bumi's damage, but gave no detail on how he intends to achieve his goals.
Bumi plc also slammed the businessman for making "numerous misleading claims about conflicts of interest when shareholders should instead be concerned with the conflict of interest faced by Mr. Rothschild himself".
The Bakries and Rothschild came together in 2010 to bring Indonesian coal assets to the London market by reversing them into Vallar, Rothschild's listed investment vehicle, and renaming it Bumi Plc.
However, company infighting has driven a wedge between the two and Rothschild stepped down from the board in October.
In Wednesday's note to shareholders, Bumi Plc said Rothschild was in denial about the company's relationship with the Bakrie Group and the costly litigation his board will face if his resolutions are passed.
The company concluded its statement by urging shareholders to vote against Rothschild's proposals.
Shares fell 1.13% to 349.00p at 13:08 Wednesday.