Support sought for injunction to stop Westland takeover

Social Credit is seeking financial and legal support to lodge an urgent injunction to stop the takeover of Westland Milk Products by Chinese conglomerate Inner Mongolian Yili which is 25% owned by the Chinese government.

Party Leader Chris Leitch says there are a number of grounds the party is considering for the injunction but it doesn’t have the financial and legal resources to lodge an application before the takeover date of August 1st.

This takeover will leave Fonterra as the only significant New Zealand owned processor of milk products.

Should Fonterra should get into further difficulties no New Zealand purchaser would have the capacity to take ownership of company, with the likely purchaser therefore being another Chinese corporate. This would leave virtually New Zealand's entire milk processing capacity in the hands of overseas companies, mainly Chinese, with Tatua (which processes milk from only 114 farms) the only locally owned processor.

The Board presented only one option to farmer shareholders in the Westland cooperative and that was the outright sale of the company to Yili, when there were other options it could have and should have put to the shareholders for them to vote on.

The board did not pursue investigation of two significant options, one being a merger with Fonterra, and the other being an approach to the government for assistance by way of a Reserve Bank loan and/or assistance from the Provincial Growth Fund.

Board members who were shareholders in the company stood to make significant personal gain from the outright sale.

For example, Board Chairman Peter Morrison, whose company P&L Holdings is the second largest shareholder, stands to gain $7.1 million dollars if the sale proceeds. Federated Farmers President Katie Milne is also a director and shareholder in the company as is Pat McEvedy. Rebecca Keoghan is employed by Landcorp which is Westland’s largest shareholder.

Because of the pecuniary interests involved the Board should have set up an Independent Assessment Panel to consider the various expressions of interest and conduct negotiations with interested parties. I believe board members who were also shareholders should not have taken part in any decision regarding the options chosen.

The Overseas Investment Office decision is likely to come under the microscope.

The party’s web site will shortly have details of a bank account where donations can be sent. Donations will be used only for the injunction and subsequent legal action. Offers of legal support can be emailed to leader@socialcredit.nz

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