'Wal King is considered eminently qualified to be independent chairman.'

'Wal King is considered eminently qualified to be independent chairman.' Photo: James Davies

IT IS not often that a shareholder or group of shareholders calls an extraordinary general meeting to topple a board, take operational control and neuter a major shareholder citing allegations of ''serious conflicts of interest'', ''misrepresentation and obfuscation'', financial irregularities and misappropriation of $1 billion of corporate funds.

But in London, former Leighton boss Wal King has put his imprimatur to a 28-page letter released to shareholders of London-listed coalminer Bumi plc that says just that.

Given the tone of the letter and the battle that will ensue between two major shareholders in the lead-up to the EGM on February 21, it is something of an irony that the venue chosen for the showdown is the Honourable Artillery Company in London's City Road. According to the website it was incorporated by Royal Charter in 1537 by Henry VIII, a king who wasn't averse to cutting off heads.

The fight has attracted global attention well beyond what Bumi's $1.3 billion market size would seem to merit as the story unfolds of intrigue, shadowy deals, whistleblowers, politics, power - and of course money. It comes a day after The Sunday Times interviewed Bumi chairman Samin Tan, who said the plan was doomed because the Bakries, the largest shareholders, had vowed to enforce legal rights to stop it.

''It's fine that Nat [Rothschild, who called the EGM] has a plan, but I don't believe he can execute it. He has proven that his confrontational approach does not work.''

The letter, released by Rothschild, asks shareholders to vote to remove 12 of Bumi's 14 directors, remove the chief financial officer and chief executive, seek control of a key asset, Berau Coal, and enforce the selldown of the Bakrie Group and associated shareholders known as the Bakrie Concert Party.

King is holidaying in the US but has been talking to shareholders ahead of the EGM. He is considered eminently qualified to take on the role of independent chairman of a company that has been dogged with controversy for more than a year.

Indeed, his experience in Asia and contract mining was behind the decision to offer him the role as chairman. He was chief executive of Leighton for 23 years and during his reign he took the construction company from a market capitalisation of $70 million to $10.3 billion at its peak by expanding into Asia and creating the biggest contract miner in the world.

Bumi plc, which holds a series of coal assets in Indonesia, including an 85 per cent stake in one of Indonesia's biggest coalminers, Berau Coal, was listed on the London Stock Exchange in November 2010 at $3 billion. The Bakrie family emerged with 30 per cent and Rothschild's shell company, Vallar, 14.9 per cent. According to Rothschild, the intention of the listing was to ''create the world's largest and lowest-cost producer of thermal coal'' and bring improved standards of operational management, financial discipline and corporate governance to its operations in Indonesia.

The letter to shareholders alleges a failure by the board to secure effective control of key Indonesian assets, a failure to ''prevent or seek redress'' for the misappropriation of company assets, a failure to explain why the board allowed the chief executive to change his CV, and a failure to require the chairman to explain the exact nature of his side deal with the Bakrie Group.

The letter also questions a loss of $75 million of funds from one of the company's assets, Berau, which it says is unaccounted for; it questions why the board didn't look into claims by a former CFO of Bumi Resources, Stefan White, of possible financial irregularities in relation to capital expenditure at the Pendopo coal project; and it says a 30 per cent stake in infrastructure assets of PTMP that was transferred in June 2012 from Bumi Resources to Tata Power for $1 was a ''blatant transfer of value out of the group''.

But the biggest criticism is of the board's decision not to release the findings of an investigation into the company's financial transactions by law firm Macfarlanes. ''We believe the subject matter of the Macfarlanes investigation provides a damning indictment of the inner workings of the Bakrie Concert Party and that, had it occurred in the UK, could constitute seriously criminal behaviour, if proven.''

It says the failure to make public the findings represents a ''serious disappointment for shareholders'' seeking to discover what happened to up to $1 billion of misappropriated corporate funds. ''Equally disappointing is the company's decision announced in January 2013 not to pursue many of the pressing lines of inquiry presented by the whistleblower disclosures and other evidence.''

The board rejects the allegations and claims it was unable to access the required data from Bumi Resources. It says its decision not to publish the report was partly based on the fact that it was unable to check the veracity of the whistleblower.

However, Rothschild dismisses this on the basis that the chairman of Bumi should have been able to secure the law firm all the access it needed given he ''controls three seats on the Bumi Resources board (including himself and the CFO position) as well as 29.2 per cent of the voting rights of Bumi Resources.''

The stoush is complex, the stakes are high and the allegations are serious. With another 17 days left until D-Day, a lot can happen, and undoubtedly will.