Bumi director survives showdown

Sir Julian Horn-Smith has a contrarian take on the City’s most public corporate governance debacle in recent times.

“If there was ever a demonstration that London works – this is it,” said the senior independent director of Bumi , in reference to the alleged loss of funds from businesses partly-owned by the FTSE 250 coal miner.

“It’s only when London governance was applied that some of these things were uncovered.”

Grammar school-educated Sir Julian was one of two eminences grises appointed by the financier Nat Rothschild to the board of his cash-shell Vallar in 2010 before it announced a $3bn coal deal with Indonesia’s powerful Bakrie family.

Along with Lord Robin Renwick they were meant to provide Bumi’s governance checks and balances, which accompanied the imprimatur of a premium London-listing.

However, amid plummeting commodity prices, financial irregularities and public spats between Mr Rothschild and the Bakries, it hasn’t worked out as envisaged.

Thursday saw the denouement of the Bumi power struggle, in the form of an extraordinary meeting that took place, appropriately enough, at the City-based Honourable Artillery Company. With the dark-suited Mr Rothschild playing the audience heckler to Sir Julian’s stage compère – the former taking the floor microphone to lambast the grandees in front of him – his attempt to purge most of the Bumi board failed.

Sir Julian’s proposed exit received the least support of all the resolutions on offer. But, with 38.4 per cent of the vote against him, many directors in normal circumstances may well have resigned anyway.

“These are not normal circumstances,” said Sir Julian, who added his role was to ensure the board could presently execute the Bakries’ proposed separation from the company.

Best known for helping steer Vodafone in its early days, Sir Julian was a director at Lloyds bank and De la Rue, the banknote printer. A fluent French and German-speaker, he also had a reputation for getting on with businessmen from different cultures.

“He is a true internationalist,” said Sir Chris Gent, chairman of GlaxoSmithKline and Vodafone’s former chief executive. “He has a very easy manner with people of different cultures and is very good at understanding different peoples’ point of view,”

In one anecdote during the late 1980s, a German businessman enquired about the picture on Sir Julian’s credit card, which were not common in Germany at the time. In a faux pas worthy of British TV comedy Fawlty Towers, Sir Julian replied that it was “a holocaust” before switching to “hologram”.

“Despite the gaffe they remained firm friends – people value his views as an adviser,” said Sir Chris.

Earlier this month, during a late lunch in London’s Borough market, Sir Julian spoke of disappointment in a measured, authoritative voice that combined his tone of a public school headmaster with the ruddy, stout appearance of a prosperous village butcher.

Bumi had been “a failure” he admitted, in a reference to its 60 per cent drop in value since listing, before demolishing a mean-sized portion of grilled squid.

With Mr Rothschild vowing to fight on in the name of minority shareholders, it is unlikely to be the final act in the Bumi soap opera.

Meanwhile Sir Julian will have to help steer the board through the pending outcome of an investigation by the UK’s Takeover Panel and a report on possible corruption at Jakarta-listed Bumi Resources in which the London company has a stake. But Sir Julian is phlegmatic about the damage sustained.

“We’re not selling branded beef burgers – we’re selling a commodity which has a global price…so from that perspective brand damage is less relevant,” he said. “The main thing is to get on with running the company.”