The nature of the Internet means online insults traded between two family business next gens, Aga Bakrie and Nat Rothschild, could resurface in Google searches and due diligence for years to come, even after the media storm surrounding it has died down, say family business experts.
This week the Indonesian family behind Bakrie Group formally separated itself from its ill-fated natural resources group Bumi (now renamed Asia Resource Minerals) it co-founded in 2010 with Nat Rothschild, of the English branch of the famous banking dynasty.
Rothschild had raised $700 million (€469 million) from investors in London for the company, which had stakes in a Bakrie Group coalminer and another Indonesian mine. The $3 billion company aimed to become a become a blue-chip, UK-listed mining group.
But just a year after Rothschild and the Bakrie families had joined forces tension was already brewing, and stock prices dropped two thirds following a public furore regarding the governance of Jakarta-listed PT Bumi Resources, and accusations Rothschild was exploiting company money for his private jet.
This week the parties officially separated with the Bakrie family buying back their coal mining asset for $501 million.
But not keen to let the divorce settle without a few parting shots, Nat Rothschild, 42, tweeted Aga Bakrie, 32 – the son of company chairman Nirwan Bakrie – to thank him for buying back a “worthless pile of turd”. The former hedge fund manager then went on to call Bakrie “dumb” and his father “an evil genius”.
Bakrie flung the “dumb” insult back at Rothschild, also calling him an imperialist, before adding: “Good bye London . . . It was a bittersweet experience”.
Not wanting to let Bakrie have the last word, Rothschild retorted London had invested $1.2 billion into Indonesia through the deal and again resorted to name calling, describing him as a “dumb schmuck”. “No family has done more to blacken Indonesia’s investment climate than yours,” he added.
Trying to bring the online spat to a close Bakrie said: “Congrats on the separation, all the best for you. As we Indonesian say selamat malam pak [“good evening sir”] Nat.”
Sandy Loder, a consultant to wealthy families at AH Loder Advisers and also a member of the Fleming banking family, says Rothschild’s name links him to the many eponymous family businesses that are part of the European dynasty even if he does not work for any of them.
“I don’t think it’s majorly going to make a difference to the bottom line of Rothschild the bank, but these things sit around online – if people want to carry out due diligence these things are still there years on,” Loder says.
“It may make people nervous if they’re going to do a deal with that family and then wonder if they too are going to be as ridiculed in the public domain if the deal doesn’t go right,” Loder says, adding: “It could make them very nervous and may make them go away or make some strict non-disclosure agreements or other measures.”
Loder describes social media as an “Achilles heel” in reputation management, “because it’s so easy to do it off your iPhone in the heat of the moment”.
Keith Whitaker of US-based family business think-tank and consultancy Wise Counsel Research Associates says the participants in the contretemps may or may not have had good reasons for their comments. “But a simple rule of thumb regarding publicity is that when you toss dirt, some inevitably sticks to yourself.”
Most family businesses Whitaker knows have policies in place regarding publicity, and these have been extended to include social media policies following the proliferation of networks like Twitter and Facebook.
But Whitaker says these policies generally only extend to family members who are actively involved in the business, such as managers or board members, and to their commentary on business matters. “Difficulties can arise when a family has a public name, since the comments of members who are not in the business may nonetheless impact the business' reputation,” Whitaker adds.
But Whitaker says that social media can provide an opportunity for each generation to work together in a positive way. “The older generation may hold more of the concern about reputation and legacy. But the younger generations may have much more expertise in the workings of social media and be able to educate the family about its workings, its power, and its promise.”
He says regular family meetings, which include those inside and outside the business, should address social media policies and raise awareness of the effect blog posts, tweets and comments can have on the business and family relationships.
Rothschild is the son of Jacob Rothschild, who worked in the family business N M Rothschild & Sons until 1980 when he was overlooked for the role of chairman and then sold his minority stake in the firm.
The Bakrie Group, founded by Achmad Bakrie in 1942, is now in its second generation and had revenues of €1 billion in 2012.