Rt Hon Winston Peters
New Zealand First Leader
Member of Parliament for Northland
3 AUGUST 2016

NZ Farmers Being Led up River with Shanghai Maling Deal

New Zealand First says shareholders in Silver Fern Farms (SFF) should be demanding resignations over the shameful way their co-op is being sold out from underneath them for a paltry $57 million.

“This deal smells worse than a rendering plant without odour control,” says the Rt Hon Winston Peters, Leader of New Zealand First and Member of Parliament for Northland where a major SFF plant is based.

“For $50m plus another $7m to meet ‘the co-op’s directors’ fees and related costs into the future’ Shanghai Maling/Bright Food gets to: hire/fire the CEO; approve the annual budget and cash flow; set the strategic plan; and even decide if there will be a dividend payment.

“That’s a lot for not very much when the chair will also be appointed by Shanghai Maling and they’ll hold the casting vote. Only when they have these controls will a promised $261m be invested but that could easily be reversed, or used to ‘invest in developing the Chinese market’.

“The spiteful notice of meeting sent out to shareholders, presents no legal opinion that says selling 50% of a $600m co-op is not a major transaction as defined by law.

“Instead, they’ve turned to their Australian corporate advisors, Grant Samuel, to back the board view. Yet Grant Samuel is part of the same crowd who last year said SFF faced liquidation or receivership if this deal wasn’t done. People should take what Grant Samuel say with a pinch of salt.

“The very directors who said last year that SFF was in crisis and facing liquidation are condemned out of their own mouths. In the later advice to shareholders and the media they are now saying that last year was a good year for SFF. They lied last year so who’s to know they are not lying now.

“If SFF does fall into Chinese control, there’s no analysis whatsoever of the risk Chinese control poses to SFF’s lucrative beef exports to the United States and ASEAN countries. Hitching up to the Chinese market becomes a major liability and if you doubt that, just go and ask Fonterra farmers.

“And just who are SFF shareholders getting into bed with? SFF’s propaganda talks up Shanghai Maling as a giant but its earnings per share is much worse than SFF and it generates about the same annual revenues. Its parent company, Bright Food, also has debt levels akin to a Third World Country.
“SFF management, directors and a cabal of shiny suited corporate advisors are leading SFF shareholders up the river with barely a murmur from regulators.

“Take the weak-kneed Financial Markets Authority whose Chief Executive, Rob Everett, ruled out using its investigative powers a full week before they met with Silver Fern Farms. Even after just one meeting they found issues with transparency but didn’t lift a finger to dig further into the issue.
“As for the trade and rural media, they’ve got to stop acting like cheerleaders for this shameful deal and start doing their job of reporting. They’ve been lied to over financials, the threat of receivership and even important key dates, so their silence speaks volumes,” Mr Peters said.

ENDS

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