* Shareholders hope ARMS will return more
* UK market watchdog investigation into ARMS ongoing
* Founders exchange insults on Twitter
* ARMS gives no timeframe for $400 mln return
(Recasts with details on Twitter exchange)
By Silvia Antonioli and Stephen Eisenhammer
LONDON, March 25 Coal miner Asia Resource
Minerals (ARMS) on Tuesday announced its long-awaited
split with the Indonesian family that helped found it, sparking
bitter posts on Twitter between a family member and fellow ARMS
founder Nat Rothschild.
Indonesia-focused ARMS, previously known as Bumi, was
founded in 2010 by the influential Bakries and financier Nat
Rothschild, with the aim of giving London investors access to
promising Indonesian coal assets.
The business suffered from boardroom rows, allegations of
wrongdoing and falling coal prices. Its shares have lost almost
80 percent of their value since the business was set up.
Tuesday's fiery Twitter exchange between Rothschild and Aga
Bakrie, a member of the politically-connected Bakrie family,
demonstrated the extent to which the company founders'
relationship had soured.
"Whilst your dad is an evil genius (yes I'm paying Nirwan a
compliment), the word on the street is that you are extremely
DUMB," tweeted Rothschild, who has a stake of about 16 percent
in ARMS, to Bakrie.
To this Bakrie replied: "Dumb, I believe that's the word
that has been associated with you by most of the people that I
In an attempt to revive the business's fortunes, ARMS
shareholders voted in December to split from the Bakrie family,
but this took longer than expected due to difficulties of
raising the necessary cash.
As part of the separation process, outgoing ARMS Chairman
Samin Tan bought the Bakries' 23.8 percent stake in ARMS through
investment vehicle Borneo Lumbung Energy & Metal Tbk.
ARMS sold its 29.2 percent stake in Jakarta-listed miner PT Bumi
Resources to the Bakries for $501 million. The deal
pushed Borneo's ARMS stake to 47.6 percent.
In another tweet Rothschild thanked the Bakrie for buying
Bumi Resources to which he referred as "a worthless piles of
The Bakrie member replied that Indonesia is an amazing
With the split now completed, ARMS will focus on turning
around its other main Indonesian subsidiary, Berau Coal
, while giving up a stake in Asia's top thermal coal
exporter PT Bumi Resources.
"I feel vindicated. There were a number of stakeholders
saying this would never happen. I can't say it has been easy, it
was a complicated transaction, but to have achieved this is
excellent for our shareholders," ARMS Chief Executive Nick von
Schirnding said in a phone interview.
"Our focus is on our subsidiary now. We need to regain
credibility and today's announcement is the first step in that
ARMS said it would return $400 million to shareholders but
did not give any timeframe.
Shareholders welcomed the completion of the separation but
said they hoped ARMS would return closer to the $501 million it
got from the deal.
"I think it's important to return the maximum amount of
money because there is no appetite from the major shareholders,
certainly not from me, to entrust money with the management team
in London to redeploy that capital," Rothschild said.
"We want the business ... to be run as efficiently as
possible and for all dividends to be passed through to
ARMS said it was cooperating with regulatory investigations.
Britain's Financial Conduct Authority (FCA) and the Takeover
Panel, an independent body that supervises takeovers to ensure
fair treatment for all shareholders, are investigating the
company's formation in 2010 and subsequent events.
Last year Rothschild asked the FCA to look into whether ARMS
made misleading statements to the market.
ARMS said it would now try to trace and return to
shareholders money the company says is owed by the former head
of its Berau subsidiary Rosan Roeslani.
The company in November started arbitration proceedings
seeking to recover $173 million from Roeslani in Singapore, but
said on Tuesday it will take all appropriate actions with
authorities in the UK, Indonesia and other relevant
(Editing by Jane Merriman, David Holmes and Andrew Hay)