Gordon Lucas, the former chairman of Cromwell Saleyards Company, was responding to criticism by a group of central Otago farmers who questioned the reasons for the sale and the process followed.
A selling complex, yards and between 4ha and 5ha of land was sold to a property developer earlier this year for $1.6 million but Tarras farmer Beau Trevathan said the sale process was flawed and driven by shareholders no longer farming but who wanted to cash in their shares.
Trevathan said the first many shareholders knew of the sale was in January when the removal of yards and buildings was advertised for public tender.
By the time shareholders were invited to vote on the sale in early May, the tender had been granted and Trevathan said directors had a block of supporting proxies.
“We were on a hiding to nothing.”
Lucas said the sale of land kept the company afloat but the process of selling the complex was the only option when losing money and being unable to pay secretarial services or the annual $15,000 audit fees.
“It was a very clumsy and expensive company to run for three sales a year.
“There were ongoing costs so we took it upon ourselves to advertise publicly for a tender. We sought an independent valuation and we got significantly above that.”
Lucas was happy with the process followed adding that neither the largest shareholder, PGG Wrightson, nor any director voted on the motion to sell, yet it had support from 84% of voting shareholders.
“It was a very clumsy and expensive company to run for three sales a year.”
Gordon Lucas
Cromwell Saleyards Co
“Isn’t that a democratic decision?”
But Trevathan said getting information had been difficult, shareholders had not had a chance to discuss solutions and they had not been given independently audited accounts before voting.
He said his investment in the saleyard’s company was an extension of his business and he did not expect dividends.
The closest saleyards for farmers at Cromwell, Wakatipu, Upper Clutha and Wanaka were now 100km away at Omarama for sheep and 50km at Omakau for cattle.
PGG Wrightson Alexandra regional account manager Graham McCambridge said the Omakau yards would be extended if there was demand.
Trevathan acknowledged the number of sales had fallen but it served as a valuable outlet for farmers.
This year there was just four sales, one sheep and three cattle. Twenty years ago 50,000 sheep were sold, this year there were 5000.
Trevathan said his experience proved a valuable lesson about complacency
Like many farmers he never attended annual meetings of the saleyard company and showed little interest in its governance so was surprised when the decision was made to sell the yards.
“We never saw this coming.”
