King-hitter in eye of the storm
Former Leighton head takes on Bumi's board in a clean sweep, writes Alistair Osborne.
LUCKILY, Wal King is known as a corporate bruiser. The straight-talking Australian, who built Leighton Holdings into the country's biggest engineering and construction firm during a thumping 42-year stint, will certainly need all his street-fighting nous.
King is the man proposed by Nat Rothschild as the new chairman of Bumi, the Indonesian coalminer riven by internecine warfare after a spectacular fallout between the billionaire financier and Indonesia's Bakrie family.
Things have come to a head after Rothschild, who created Bumi via a $US3 billion deal with the Bakries, called an extraordinary general meeting to oust 12 of the company's 14 directors, including the chairman, Samin Tan, and the chief executive, Nick von Schirnding. The showdown is due at the end of next month.
Ask King, 68, why he thinks his team should be in charge and he doesn't mince his words. "The board seem to me like a bunch of people stuck in a canoe being swept down a river watching the jungle go by.
"They look to be frozen at the controls. They are either unable, or unwilling, to do what they should do in terms of their responsibilities as directors."
Like Rothschild, King believes the board has done far too little to recover at least $US1 billion of funds missing from Bumi's Indonesian assets, the row over which has contributed to a two-thirds fall in the share price.
In September the law firm Macfarlanes was brought in to investigate, but its inquiry has been accompanied by claims and counterclaims of theft, email hacking and lies. Last week, Bumi said it could not publish Macfarlanes' report because of concerns about the "provenance" of materials Rothschild handed the board.
King does not buy that. "There's a certain amount of posturing going on," he says. "At the end of the day you just have to look at the related-party transactions, and they are not kosher.
"Any thinking shareholder has got two choices: continue to watch their money evaporate, or support a plan that sees the restoration of value."
King says that so far he has had a "positive" reception from shareholders and reckons he has a "good sporting chance", not least because he is a new broom, with no conflicts of interest. But isn't he just in Rothschild's camp? "I've known Nat for a few years, too long," he jokes, "but in terms of my position I'm not a close associate of anyone."
Rothschild, with 18.2 per cent of the votes, is up against a concert party restricted to a 29.9 per cent voting stake of the Bakries, Tan and a 9.8 per cent investor, Rosan Roeslani.
In 23 years at Leighton, King transformed the company from a $US17 million business into one worth $US8.5 billion. He left in 2010 with a package worth $US13.3 million and "a retirement benefit" of $US12.6 million that drew controversy when the company booked a a $US406 million loss in 2010-11. King insists he's "not on any bonus scheme whatsoever" for winning the EGM.