Financier Nat Rothschild has resigned from the board of Bumi Plc, the coal mining group he co-founded two years ago, attacking his partners and directors of the London-listed firm as they consider unravelling the Indonesian venture.
Rothschild's resignation comes as the board of the miner is looking at a $1.38 billion offer from Indonesia's influential Bakrie family, who co-founded the venture with Rothschild, to exit their stake and take back the firm's operating assets.
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The offer last week followed allegations of wrongdoing at some of those Indonesian operations - including part-owned Bumi Resources, the jewel in the Bakrie family crown - that sparked an independent investigation and heightened already strained relations between Bumi shareholders.
"Given the scale of the alleged irregularities, as well as other facts not yet in the public domain, it would be a disgrace to proceed with, or even to entertain, the proposal," Rothschild said in a letter to Bumi chairman and major investor Samin Tan.
"I believe that this proposal is so obviously not in the interests of minority shareholders that I find it impossible to stay on as a director. I am afraid that I have lost confidence in the ability of the (Bumi) Plc board to stand up for investors."
Rothschild said Tan was complicit in the oppression of minority shareholders. He also said in his letter that he regretted that Tan and the Bakries had "done such damage to Indonesia's reputation internationally".
There was no immediate public response from Tan to the letter.
"What a disappointment Mr Nat Rothschild has been to us and all shareholders," Christopher Fong, Bakrie Group Senior Vice President. "This man has a lot to answer for, and now he has the audacity to say we have disgraced Indonesia."
Fong repeated the Bakries' call for Rothschild to return all shares and other benefits received as commission for the venture, which is now being dismantled.
The Bumi Plc boardroom is no stranger to battles between investors.
Rothschild's call last year for a "radical clean-up" saw him ousted as co-chairman. As Bumi's shares tumbled this year, tensions had also risen between Tan, who invested $1 billion to bail out the Bakrie family, and the Bakries themselves.
Rothschild said Tan, whom he said would receive more favourable treatment than smaller investors in the plan to dismantle the group, was not acting in the interests of minority shareholders in Bumi Plc.
He said Tan, a partner of the Bakries, would be reimbursed for his $1 billion, debt-funded investment at 10.91 pounds a share, against 4.30 pounds a share for other investors. The company's stock is currently trading at 2.45 pounds.
"I regret to say, it (is) also my opinion that investors cannot have confidence in the ability of the (Bumi) Plc Board to do the right thing," Rothschild said.
Bumi said its directors, which have appointed investment bank Rothschilds to do due diligence on the Bakrie split proposal, were "unanimous" that a solution should be considered on a separation after "irreconcilable differences" between the miner's founders.
"But they have not formed a view on value," Nick von Schirnding, Head of Corporate Affairs at Bumi Plc, said.