Like divorces by couples, corporate divorce is rarely pretty.
But the one between Bumi, a London-listed Indonesian coal company, and its co-founders is turning out to be a particularly nasty, and public one, culminating on Tuesday with a tirade of schoolboy insults hurled across Twitter between the scion of one of Britain’s financial dynasties and a member of one of Indonesia’s most powerful conglomerates.
Here’s what Nathanial Rothschild, the 42-year-old financier, former playboy and a major stakeholder in Bumi (renamed Asia Resource Minerals in December) had to say to his outgoing partner, Aga Bakrie of the powerful Bakrie family in Indonesia â€" on Twitter:
Then more:
Mr. Bakrie’s response left no doubt that the feelings were mutual:
Mr. Rothschild then inquired, not-so-gently, into Mr. Bakrie’s other business interests:
and then
It only got better from there. There was some back and forth about the Indonesian investment climate. And then some playground insults over who was dumber.
First, Mr. Rothschild to Mr. Bakrie:
Mr. Bakrie’s retort:
Mr. Rothschild, in an interview, was more circumspect than he was on Twitter, where he has been tweeting for all of two weeks. He was listening to a lecture on health economics at King’s College when he saw Mr. Bakrie tweet about the deal and felt the need to respond (no disrespect to the lecturer).
“This is a case of old-fashioned fraud by a U.K. public company director, and we will continue to highlight it until the person is held accountable or the money returned,†he said.
Behind the barbs is a business implosion with allegations of fraud, mismanagement and incompetence.
Mr. Rothschild, the Oxford-educated, reformed playboy (he reportedly now goes to bed at 9:30 every night), formed a shell company in 2010 called Vallar. He raised £707 million ($1.17 billion) to buy mining assets. Through a JPMorgan banker, he teamed up the Bakrie family, one of Indonesia’s most powerful families.
Vallar bought 75 percent of Berau Coal and 25 percent of Bumi Resources Group, both mining assets, for $3 billion (in a deal made up of a combination of cash and new Bumi shares) in November 2010. In April 2011, the company became Bumi plc. Mr. Rothschild put in about $120 million of his own money. The deal allowed the Bakrie family to appoint the chairman, the chief executive and the finance director. (This would cause problems.)
At the time, there appeared to be insatiable demand for coal-generated power coming from China. But coal prices then fell, and things got ugly, with allegations of fraud and mismanagement. At one point, Mr. Rothschild wrote a letter to the board outlining concerns about accounting irregularities and leaked it to The Financial Times and Bloomberg. The share price plummeted.
“Nat is a very good friend of mine, but he does tend to go straight into the wall head down hoping the wall will break,†Simon Murray, chairman of the commodities giant Glencore International Plc, told Bloomberg.
People close to Mr. Rothschild, who is the youngest of four children of Jacob, the 4th Baron Rothschild, said he felt strongly that the fraud should be exposed and that the board was doing little to stop it. Eventually, the Bakries left the board and new management was brought in.
Mr. Rothschild tried to have that management removed as well. His efforts failed.
Shares in the company have lost more than 75 percent since the company went public in 2010. At the time, it was one of London’s most successful initial public offerings, and Mr. Rothschild followed it with another blank-check I.P.O. with nearly $2 billion to invest in oil assets.
On Tuesday, Asia Resource Minerals announced a $500 million deal in which the Bakrie family sold out of the London-listed company and used the proceeds to buy back its share of the Indonesian business, Bumi Resources. The sale prompted the Twitter exchange, making Mr. Rothschild â€" a fairly well-known asset in financial circles, famous among a small set on Twitter.
The upside in the big mess of Bumi and the Bakries is that Mr. Rothschild is nearing 2,000 followers on Twitter. There’s no word on what his family had to say about his tweeting.
