King-hitter in eye of the storm
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.
Telegraph, London
Frequently Asked Questions about this Article…
Nat Rothschild has called an EGM to try to remove 12 of Bumi's 14 directors, including chairman Samin Tan and CEO Nick von Schirnding. The move follows a public fallout with the Bakrie family and concerns about at least US$1 billion missing from Bumi's Indonesian assets. The showdown is due at the end of next month and aims to change the board to restore value.
Wal King is a straight-talking Australian executive who built Leighton Holdings from a small business into a company worth about US$8.5 billion over 23 years. Nat Rothschild has proposed King as Bumi's new chairman because King is seen as a corporate tough‑operator who could tackle the company’s governance problems. King says he has no conflicts of interest and that shareholders have given him a positive reception so far.
The article highlights allegations that at least US$1 billion is missing from Bumi’s Indonesian assets and that there have been questionable related‑party transactions. The situation has spawned claims and counterclaims of theft, email hacking and lies, which have contributed to a large fall in the share price.
Macfarlanes was engaged in September to investigate the issues. Bumi later said it could not publish the Macfarlanes report because of concerns about the “provenance” of materials Nat Rothschild provided to the board. Wal King and Rothschild have suggested some of the board’s responses amount to posturing.
According to the article, Bumi’s share price has fallen by about two‑thirds amid the governance battle and missing‑funds allegations. For everyday investors that means a significant erosion of value and a choice between holding on and hoping for a recovery (for example via board change) or cutting losses—keeping in mind outcomes depend on votes and investigations.
The article says Rothschild controls about 18.2% of the votes. He faces an opposing grouping described as a concert party restricted to a 29.9% voting stake involving the Bakries and Samin Tan, and investor Rosan Roeslani holds about 9.8%. Those vote percentages will be pivotal in determining whether Rothschild’s slate, including Wal King, can win control at the EGM.
Investors should weigh the scale of the alleged losses (around US$1 billion), the potential impact of related‑party transactions on value, the likelihood of board change restoring value, and how the voting stakes line up. The article suggests shareholders face a clear choice: accept ongoing value erosion or support a plan aimed at recovery. Make sure to follow official company updates and consider professional advice where appropriate.
Wal King has said he is not on any bonus scheme related to winning the EGM and stresses he has no conflicts of interest. The article notes his past Leighton exit included a controversial compensation package, but King insists his position with Bumi is independent and that he is not a close associate of anyone driving the campaign.
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