Subject category:
Finance, Accounting and Control
Published by:
INSEAD
Version: 12.2013
Length: 25 pages
Data source: Published sources
Abstract
This case looks at the challenges encountered by foreign investors when investing with family-owned business groups in Asia. The focus is a US$3 billion investment in 2010 by Nathaniel Rothschild, a scion of the well-known banking dynasty. Rothschild and his business associates created a LSE-listed shell company, Bumi PLC, which acquired PT Bumi Resources and Berau Coal - among Indonesia’s largest coal mines and the world's largest exporters, both controlled by the Bahrie brothers, a powerful clan whose patriarch is a candidate for the Indonesian presidency. After losing at least 70% of the investment in three years, Rothschild eventually requisitioned an extraordinary general meeting in February 2013, attempting to remove the Bakries and associates from Bumi's management team. This case is designed for a course in corporate finance on the topic of family business and/or raising funds, or a course in international finance or investment in emerging markets (in particular, Indonesia). Alternatively, the case could be used in a course on corporate governance on the topic of shareholder ativism and board monitoring.
Industry:
Other setting(s):
2013
About
Abstract
This case looks at the challenges encountered by foreign investors when investing with family-owned business groups in Asia. The focus is a US$3 billion investment in 2010 by Nathaniel Rothschild, a scion of the well-known banking dynasty. Rothschild and his business associates created a LSE-listed shell company, Bumi PLC, which acquired PT Bumi Resources and Berau Coal - among Indonesia’s largest coal mines and the world's largest exporters, both controlled by the Bahrie brothers, a powerful clan whose patriarch is a candidate for the Indonesian presidency. After losing at least 70% of the investment in three years, Rothschild eventually requisitioned an extraordinary general meeting in February 2013, attempting to remove the Bakries and associates from Bumi's management team. This case is designed for a course in corporate finance on the topic of family business and/or raising funds, or a course in international finance or investment in emerging markets (in particular, Indonesia). Alternatively, the case could be used in a course on corporate governance on the topic of shareholder ativism and board monitoring.
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Industry:
Other setting(s):
2013