The Companies Office and Financial Markets Authority – bodies charged with administering business behaviour – have both rejected complaints about SFF’s handling of last October’s shareholder vote, the financial information supplied to its shareholders and to Shanghai Maling.
But a more important hoop it could be argued SFF has easily traversed is shareholder support.
The fact is last October it received overwhelming voter backing for the deal, a turnout of 67% of shareholders of which 82.22% were in favour.
Opponents of the deal may not agree, but SFF has met its fiduciary requirements and has shareholder support.
Certainly questions could be asked if that was an acceptable level of support for such a significant transaction?
The level of support was consistent with its constitution and dwarfed Fonterra’s recent shareholder vote on governance and representation which attracted 58.6% of eligible voters.
Criticism is also justified at the lack of information in the lead up to the vote of the excellent year-end result released just three weeks after the October meeting.
Ideally SFF would not need offshore backing but of more relevance in this debate is the fact that the beleaguered meat industry needs a game-changer and to do that companies need capital.
But shareholders in meat companies have previously shown a reluctance to stump up fresh capital – with some justification given their poor and often erratic performances.
As revealed by the NZ Farmers Weekly last week, banks are tiring of funding meat company debt.
One good year does not signal a financial turnaround as SFF revealed this year when issuing a profit warning and ANZCO showed with its 18 month result.
The other unavoidable factor in this debate is the amount of cash Shanghai Maling is investing in SFF. The $261 million and preferential access to Chinese markets should be that game-changer. It cannot be ignored.
Neal Wallace
