Bumi Recovers $173 Million of Missing Funds From Former Director

Bumi Plc, the Indonesian coal producer trying to recover $201 million in missing funds, said it agreed to recover the majority of the money in a deal with former company director Rosan Roeslani.

Roeslani, the former chief executive officer of Bumi’s PT Berau Coal Energy unit, will transfer Berau assets and cash valued at $173 million while Bumi will waive potential claims against him over the missing funds, it said today in a statement. The agreement must be approved by shareholders.

Bumi has been at the center of a battle for control between co-founders Nathaniel Rothschild, scion of a centuries-old British banking dynasty, and Indonesia’s Bakrie family since the $3 billion deal that brought them together started to sour in late 2011. Waning coal prices, board infighting and probes in the U.K. and Indonesia have weighed on the stock, which plunged 69 percent in London last year.

The missing assets to be recovered from Roeslani include a shareholding in a company that transports all coal produced by Berau and another that owns the land it uses for its operations, London-based Bumi said today. The agreement with Roeslani states he has made no admission of wrongdoing or liability, Bumi said.

Roeslani didn’t respond to an e-mail seeking comment today.

“It is not up to the company to decide whether or not he can be exonerated,” Rothschild said in e-mailed comments to Bloomberg News. “The London regulators need to take action to send a message to foreigners who believe listing in London is a pushover.”

SFO Talks

Chief Executive Officer Nick von Schirnding told reporters today at Bumi’s annual general meeting in London that the company had held talks with the U.K. Serious Fraud Office on the matter.

Bumi said last month that Roeslani received “substantially more” in salary, bonuses and other benefits than had previously been disclosed. He was paid $3.8 million in 2011, according to Bumi’s annual report, published May 31. In last year’s annual report Roeslani was said to have received $700,638 in salary and bonus for 2011.

Roeslani said the details in the report were “baseless, one-sided, and appear to be motivated by the need to deal with the ongoing Bumi shareholder dispute,” according to a June 12 statement.

The creation of Bumi brought together Rothschild and the Bakries, a family-owned palm oil-to-property empire founded in Sumatra in 1942. Bumi and the Bakries announced a deal to unwind their investment in October that involved the Bakries exchanging their 23.8 percent of Bumi Plc for 29.2 percent of PT Bumi Resources in a cash-and-share-swap deal, leaving Bumi Plc in control of Berau Coal.

$278 Million

According to the terms of the deal, the cash component would be $278 million to buy PT Bumi stock at 680 rupiah a share. The stock closed today at 530 rupiah in Jakarta. A shareholder vote on the agreement, previously scheduled for today’s AGM, is now likely to be completed “before autumn,” Von Schirnding said last month.

“While the mechanics of the separation are still being worked on, I am confident we are nearing the end of this process,” he said today.

Bumi has previously sought assurances from the Bakries that they will be able to fund the cash component of their offer, and Von Schirnding said in May that he’ll be enforcing the terms of the original October proposal.

Full Funding

The Bakrie Group said in a statement yesterday that it had the full amount of funds available to complete the deal and was waiting to hear from the board of Bumi on “how they wish to proceed.” Chris Fong, a spokesman for the Bakries, didn’t respond to phone calls and an e-mail today.

Bumi said last week it remained in talks with the U.K.’s Financial Conduct Authority to end a two-month suspension of its stock trading in London. Talks with the regulator focused on work to “enhance its internal systems and controls” at Berau Coal, it said.

Bumi shares closed at 259.3 pence on April 19, the last day they were traded.

Pensions & Investment Research Consultants Ltd., which advises institutional investors with combined assets of more than 1.5 trillion pounds ($2.3 trillion), said last week it had concerns that corporate governance at Bumi was inadequate and recommended shareholders vote against Chairman Samin Tan.

PIRC said June 18 it is unable to support the approval of Bumi’s annual report and accounts “on the basis that the auditors have qualified the accounts and a substantial sum of money is not accounted for and proper records have not been kept.”

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