Is Confusion Surfacing Once Again as Theresa Gattung’s Marketing Tool?
2 December 2010
Conflicting information between PGG Wrightson’s audited accounts and an explanation given by Theresa Gattung as a
director of Wool Partners Co-operative about a $5.8 million Wool Partners International trading loss, is highly
confusing, Waitomo woolgrower Janette Eason-Savage says.
Ms Eason-Savage, a farmer who processes wool, is a member of the Institute of Directors and a qualified and experienced
accountant. She says she has reviewed the PGG Wrightson accounts, which stated Wool Partners International had made a
$5.8 million loss since it started operation two years ago.
“But nowhere in the Wool Partners Co-operative prospectus to raise $65 million are the losses mentioned,” Ms
Eason-Savage said. “There is nothing at all about Wool Partners International’s financial performance to date”.
As a woolgrower and prospective investor Ms Eason-Savage recently joined a teleconference call hosted by Theresa
Gattung, who stated that Wool Partners International had traded at a profit over the last two years.
“I asked for clarification and Ms Gattung’s answer was that Wool Partners International would have traded at a profit if
it didn’t have to pay interest on its loans and that in the Wool Partners Co-operative structure, there will be
shareholders’ funds instead of vendor loans.”
Ms Eason-Savage added that there is also no opening balance sheet for Wool Partners Co-operative, and no independent
valuation on how the co-operative agreed the price it will pay for “selected assets” of the Wool Partners International
She has called on the promoters of Wool Partners Co-operative to publish the valuations used to determine that purchase
price, show what they include and to clarify whether Wool Partners had traded at a loss or a profit since it started
operating two years ago.
“My understanding is that information as to the financial performance of Wool Partners International – the business that
Wool Partners Co-operative is in substance buying - would have had to be disclosed in the prospectus if WPC was a normal
company, but the capital raising rules for a ‘co-operative’ are different. The promoters don’t have to declare whether
the co-operative is buying a loss making business or not.
“Show us the balance sheet and publish the full story, so we farmers can understand what we are buying into” Ms
“As a former chief executive of Telecom Ms Gattung once famously told a group of analysts that using confusion as a
marketing tool was ‘fine’ and you have to wonder whether we are seeing history repeat itself with Wool Partners
Ms Eason-Savage said if promoters couldn’t answer fundamental questions about financial viability, they should withdraw
their prospectus. Farmers wanted these questions answered and it seems the decision to extend the capital raising
closing deadline gives the promoters the chance to do this.
In May 2006, Theresa Gattung told a group of analysts:
“Think about pricing. What has every Telco in the world done in the past? It’s used confusion as its chief marketing
tool, and that’s fine.
“You could argue that’s helped all of us keep calling prices up and get those revenues, high margin businesses, keeping
going for a lot longer than what would have been the case.
“But at some level, whether they are conscious of it or not, customers know that that’s what the game has been, they
know we’re not being straight up.”