A major Indonesian investors group in coal miner Bumi Plc dropped its demand for a vote to remove co-chairman Nat Rothschild and other board members, thus averting a potentially damaging public showdown between two factions.
The Bakrie Group and partner investor Samin Tan, who between them hold 29.9 per cent of voting shares, yesterday said that they still wanted changes to the board, including putting Tan in the chairman's seat, but the matter would be pursued in the boardroom.
The two sides have been at odds since a letter from financier Rothschild demanding a "radical cleaning up" was leaked last November, and the prospects of an open shareholder battle at a general meeting saw shares tumble by around 18 per cent in the days that followed. (See: Indonesia's Bakries keen to oust Rothschild from PT Bumi Resources)
Institutional investors despaired over corporate governance and wondered whether the management would get distracted from the urgent task of cutting debt at the company's 29-per cent-owned subsidiary PT Bumi and ensuring normal operations at its mines, some of Indonesia's richest, to lift the parent's prospects.
Withdrawing their request for an extraordinary general meeting, the Indonesian shareholders issued a statement saying they would like to avoid the "highly unusual and highly damaging" process and would instead deal with board changes at a meeting on 26 March.
"We have concluded that the best interests of Bumi Plc and its shareholders will be served by withdrawing our request for an EGM," Borneo Bumi Energi & Metal PTE, the vehicle which holds the Bakrie and Tan voting rights said in the statement.