Bumi Plc shareholders should reject co-founder Nathaniel Rothschild’s bid to replace all independent directors as it may thwart plans to separate the company from the Bakrie Group, Institutional Shareholder Services Inc. said.
“Rothschild’s approach of going first for control of the company, which will likely involve litigation, could mean the separation proposal is dropped or becomes impossible to implement,” proxy voting agency ISS said in a report. ISS said it supports Rothschild’s plan to remove representatives of Indonesia’s Bakrie family and of Chairman Samin Tan.
The U.K. financier, who founded Bumi with the Bakries in 2010, has accused management and Tan of failing investors. He’s seeking to regain influence by removing 12 of 14 directors and returning himself to the board. The London-traded company, which slid 69 percent last year as both parties fought for control of its coal assets, is seeking a separation from the Bakries amid boardroom feuds and financial probes in the U.K. and Indonesia.
ISS urged shareholders to back the ouster of Tan’s representatives Scott Merrillees and Alexander Ramlie, saying “they do not appear to offer a viewpoint different from Tan’s, and may simply create a voting block rather than add additional value.” Nathin Rathod, the sole remaining Bakrie representative, should also be removed, it said.
Investors will vote at an Extraordinary General Meeting on Feb. 21 over Rothschild’s motion to oust directors including Tan and Chief Executive Officer Nick von Schirnding. Wallace King, the former head of Leighton Holdings Ltd., would become chairman, while Brock Gill would be the replacement CEO.
“We welcome ISS’s findings and are encouraged that they have identified many of the fundamental issues at Bumi Plc and the need for change,” Rothschild’s NR Investments Ltd. said today in a statement. It didn’t comment on ISS’s recommendation that shareholders vote against part of Rothschild’s proposal.
ISS is owned by New York-based MSCI Inc.