Financier Nathaniel Rothschild has called for a radical cleaning up of corporate governance at miner PT Bumi Resources, affiliate of his coal venture Bumi Plc , in a show of frustration with his Indonesian partners.

Rothschild is co-chairman of the London-listed firm, his joint venture with Indonesia's politically connected Bakrie family, which holds a 29 percent stake in PT Bumi Resources. He also owns a 10 percent stake in Bumi Plc.

In a letter written to Ari Hudaya, Chief Executive of both Bumi Plc and Jakarta-listed PT Bumi , Rothschild said the plan remained to roll out the best practices of corporate governance, but said he was not satisfied with the rate of progress at PT Bumi.

Both myself and the Bakries need an immediate transformation of the way you are choosing to manage PT Bumi Resources, Rothschild wrote in his letter to Hudaya, a long-time Bakrie family lieutenant.

Rothschild said in the letter, published on the Financial Times website, that he had been forced to set out his views formally after Hudaya's lack of response to requests via the board and the audit committee.

Rothschild, a hedge fund veteran turned mining and energy entrepreneur, said Hudaya was the mechanism through which Bumi Plc could seek to improve governance at PT Bumi, as the London-listed group does not yet have directors on the Jakarta-listed miner's board.

But he said Hudaya's dual role as CEO of both PT Bumi and Bumi Plc required closer evaluation and scrutiny.

According to two sources close to the Bakrie group, the letter was the result of a boardroom battle between the Bakries and Rothschild, in which Rothschild had demanded Ari Hudaya's replacement as CEO.

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Rothschild also listed a string of loans extended by PT Bumi that he said in the letter were a major factor in the company's over-leverage -- a key point Bumi Plc seeks to tackle -- and in its corporate governance discount, calling on the non-coal transactions to be released transparently to investors.

So whilst under any normal scenario you might be applauded for reducing the interest rate of $600 million of high yield debt from 19 percent to below 7 percent, minority investors... want to see you initiate a radical 'cleaning up' of PT Bumi Resources' balance sheet and corporate culture, he said.

Bumi completed the early repayment of $600 million of its debt to China Investment Corp earlier this week as part of efforts to cut its annual interest bill.

Thursday's letter was the first public sign of strain in the relationship between the two business dynasties, who investors applauded a year ago for creating the world's biggest thermal coal exporter.

In an interview with the FT, Rothschild said his relationship with the Bakries is just fine, adding that they would be thrilled when they read a copy of this letter.

But Chris Fong, a spokesman for the Bakrie family, whose financial difficulties forced them to sell half of their Bumi stake this month, said the letter had taken them by surprise.

Nat Rothschild hasn't addressed these issues with us, Fong said, referring to a passage in the letter in which Rothschild said the Bakries wanted a transformation in Bumi Resources.

If he wants to raise any issues, as a shareholder and board member, we would expect him to follow accepted corporate governance procedures and raise concerns at the board level and at the appropriate time.

(Additional reporting by Stephen Mangan in London; Editing by Will Waterman)