Rothschild who crashed to earth

Rothschild who crashed to earth: How the bank dynasty heir's City
reputation is in tatters after a £700m investment scheme blew up in his
face

By
Geoffrey Levy and Richard Kay

PUBLISHED: 23:13, 19 October 2012

UPDATED: 14:40, 20 October 2012

Even at 76, with untold wealth and the holder of a rare Order of Merit from the Queen, Lord Rothschild has continued to dream.

It is a father’s dream: that his only son Nat might one day lead the
world’s most enduring banking dynasty to new heights, repairing an old
family schism and burnishing its blue-chip image to even greater
brilliance.
Today Jacob
Rothschild is a bitterly disappointed, even angry man, as his son and
heir fights to save his own dwindling reputation and, with it, the first
soiling of the proud Rothschild name in centuries.




Living the high life: Nat Rothschild, pictured
with L'Wren Scott at a partu during the Cannes Film Festival, has seen
his City reputation destroyed after a deal to invest in an Indonesian
coal mining company turned sour

Nat himself can hardly believe
what has happened. A mere tick of the dynastic clock ago he was widely
seen to be on course to be the richest of all the Rothschilds.
Helped
by the pulling power of his name, he was hailed as a financial genius, a
young man — once a wild child but now drinking nothing stronger than
Coca-Cola — with a unique networking ability to bring billionaires
t
His private £5 million
Gulfstream was criss-crossing the globe for 750 flying hours a year.
That was before he decided to raise £700 million from investors — ‘big
players only’ he airily informed one relatively minor figure who
expressed interest — to plough funds into an Indonesian coal-mining
company called Bumi that a City contact had drawn to his attention.

By July, 2010, Bumi’s £10 shares had
been absorbed into his own FTSE-quoted cash vehicle, a shell company
called Vallar, which was then renamed Bumi plc.
For Rothschild’s new Indonesian
partners, the Bakrie family (one of whom is currently standing for
election as president of the country), the deal offered the back-door
prestige of being quoted on the London Stock Exchange — quite a prize to
businessmen in a part of the world not noted for the transparency of
its corporate culture.



Crisis: A top City banker said 'Nat Rothschild
will never raise another dollar from anybody' following after this deal
went bad for some investors

Yesterday,
after acrimonious disagreements and accusations in the Bumi boardroom,
and Nat Rothschild having dramatically stood down as a director, his
investors were showing a loss of three quarters of their money with the
share price slumping to around £2.50.
Nat
Rothschild’s fierce letter of resignation from the board arrived on
Monday from an address in St Peter Port on the low-tax Channel island of
Guernsey, where one of his corporate offices is registered.
Meanwhile,
an internal investigation into allegations of financial impropriety at
Bumi has expanded to include alleged threats and the hacking of email
systems to snoop on exchanges of messages at boardroom level.

The company chairman Samin Tan claimed that Rothschild indicated he’d had ‘access’ to his emails and had been reading them.
Rothschild’s response was to declare that the allegations were ‘untrue and defamatory.’ Attention
has also been drawn to the level of expenses paid to directors.

And
he did not just fall out with the Bakrie family. Senior British
industrialists he installed as independent directors to safeguard UK
shareholders’ interests also had their disagreements with him.




Dynasty: The collapsed deal has reignited
tensions between Lord Jacob Rothschild, right, and his one-time
wild-child son Nat Rothschild

Sir
Julian Horn-Smith, former deputy chief executive of Vodafone, who is
senior independent director of Bumi, asked Mr Rothschild to step down
because of his ‘disruptive behaviour’ on the board.
The
crisis has been a shock to Nat Rothschild’s overblown ego, especially
as many feel his reputation can never fully recover, and one top City
banker was quoted in The Times this week as saying that ‘Nat Rothschild
will never raise another dollar from anybody’.
Another puts it this way: ‘His name has become toxic in the City of London.’

Now,
his father Lord Rothschild, a figure of great integrity who was once a
shoulder to cry on over lunch for a distraught Princess Diana, is the
one who needs consoling, says a City friend.

To
add insult to injury, it is NM Rothschild, the family bank from which
Jacob Rothschild split three decades ago to found his own highly
successful investment trust, that has been called in by Bumi plc to sort
out the mess.



Playboy: Nat Rothschild had a reputation for being a wildchild
The
last time there were tensions between Lord Rothschild and his son — he
also has three daughters — it was because Nat was virtually running
wild, drinking and partying to excess.
Nat
has never denied an escort girl’s story that she was asked to provide
strippers and drugs to a party he threw in 1994 at Waddesdon Manor, the
magnificent Rothschild family seat in Buckinghamshire where Presidents
Reagan and Clinton, as well as Lady Thatcher, have stayed, and which is
now run by the National Trust.

According to the girl: ‘They were
very precise in what they wanted — three slim black girls in stockings,
suspenders and high heels. They also wanted the girls to do extras.’

In those days, just down from Oxford,
Nat enjoyed his wildchild reputation with almost as much pleasure as,
in recent years, he has relished being seen as a pivotal figure in the
world of billionaire finance.

True,
he spent not far short of £1 million on his own 40th birthday party
last year in Porto Montenegro, in the tiny Balkan state, but most saw
this as more of a classic networking bash — the invitations even
included helpful details of where guests could park their private jets.

And Porto Montenegro, of course, is a development on the Adriatic coast in which he has a considerable personal investment.

But
his most satisfying parties in recent years have been of the kind of
gathering in Corfu on the £80 million yacht of his good friend and
business associate Oleg Deripaska, the Russian oligarch, which ended in a
spectacular and very public fall-out with his old Oxford Bullingdon
Club friend George Osborne, now Chancellor of the Exchequer. It was to
reveal a side of Nat Rothschild which those publicly pillorying him now
would do well to consider.

For when Nat heard that Osborne had
been repeating details of a private conversation with Peter Mandelson,
who was also there, he in retaliation famously claimed that Osborne and
the Tory party fundraiser Andrew (now Lord) Feldman had solicited a
contribution to party funds from the Russian tycoon. Osborne issued an
immediate denial, but considerable damage was done.




Friends in high places: This is the family home
on the Greek island of Corfu where Nat Rothschild entertained Chancellor
George Osborne and former business secretary Peter Mandleson

Fast forward three years to a
lunch party in 2011 near St Tropez. One of the guests, on being invited
by old friends, explained he had Nat Rothschild staying with him, and
could he bring him along? And Rothschild came — but not for long.
As
one of those guests recalls: ‘We’d barely sat down to lunch when he
breezily said he was off. I can’t even remember whether he ate anything.
I can only imagine we weren’t important enough.’



Ex-wife: Nat Rothschild was married for three years to Annabelle Neilson, model friend of Kate Moss

And one figure close to him says:
‘Nat’s mind is always turning over deals. He used to be fun — more than
that — but these days, apart from the odd girlfriend, his closest
companion seems to be his St Bernard dog.’
Girlfriends
there have certainly been, including the actress Natalie Portman and,
most recently Florence von Preussen, a slim, attractive scion of the
Guinness family.

He was also married for three years to
Annabelle Neilson, model friend of Kate Moss.

Acquaintances find a
somewhat unsettled sense about him.

He has homes in Paris, Moscow, New
York and Greece but seldom spends more than a few days at a time in any
of them.
The home where he
spends most time during the winter is his sumptuous penthouse in
Klosters. He was introduced to the Swiss ski resort by Canadian mining
and property magnate Peter Munk.
While
his father Lord Rothschild continued to live in Britain — holding board
meetings in the basement kitchen of the London townhouse in St James’s
he uses as an office — six years ago Nat took Swiss citizenship and
became a tax exile.
His reputation already was that of a young man with the ability to make big money fast.
This
was the point at which the personal fortune of the son and heir was
poised to overtake the personal fortune of the father. This year’s
Sunday Times Rich List places him 73rd with a personal fortune of
£1 billion. His father is 192nd with a mere £465 million.
Over in Klosters his life is remarkably low-key. One place where he is a regular is the village’s only pizzeria, Alberto’s.

Carol
Thatcher’s partner Marco Grass is his ski instructor, while his
highly-supportive mother Serena — she and Jacob have been married 51
years today — is a regular winter guest. His peaceful life there is in
stark contrast to the battle raging over Bumi.

But
the dismay Lord Rothschild feels at the way the unseemly hostilities
over the running of a public company have engulfed Nat cannot be
underestimated.

‘He is
furious with him — they are barely on speaking terms,’ says a family
friend. ‘No Rothschild has ever before been involved in such a mess.’
Old
Etonian Nat, of course, bears the name of his 19th-century ancestor
Nathan Rothschild, who arranged the finance that helped the Duke of
Wellington win the Battle of Waterloo.





Privileged: Nat Rothschild was pictured, in the
front standing row fourth from the right, alongside Chancellor George
Osborne, far left, in this photograph of Oxford University's Bullingdon
Club in 1992

‘Sometimes,’
says an acquaintance from his Oxford days of unfettered hedonism, ‘I
wondered if he wouldn’t be able to cope with the weight of being a
Rothschild, beyond its ability to pull the girls.’
Few
City people who have encountered the slim, freckle-faced figure would
agree with that assessment. They see a man who has cleverly exploited
his family’s magnetic name to make a fortune — ‘well, wouldn’t anybody?’
says one banking figure.
But in the sensitive world of big money investment, it can take only one disaster to ruin a career.
For Nat Rothschild, the stakes may have been higher than even he initially realised.
Not
so many months ago the thought was entertained that his entrepreneurial
zeal could make him the best figure of the young generation to heal the
family split of 1980 when Jacob left NM Rothschild to establish his own
Rothschild Independent Trust, currently worth some £2 billion.
Not
any longer. The favourite now to take over when the French head of the
historic bank, Baron David de Rothschild, retires, is his son Alexandre.
For
Nat there is one bright spot in the saga, however. His father was one
of the ‘big players’ he invited to put money into Bumi. Wise old Jacob
declined.


Source:-
http://www.dailymail.co.uk/news/article-2220419/Rothschild-crashed-earth-How-bank-dynasty-heirs-City-reputation-tatters-700m-investment-scheme-blew-face.html