A group of former shareholders in the Westland Dairy Co-operative want the Overseas Investment Office (OIO) to halt or at least delay the sale of the troubled firm to a Chinese company until they have been paid fees they are owned.
Shareholders vote on Thursday on selling the Hokitika-based company to the Chinese-owned Yili International for $588 million. Photo: 123RF
Shareholders will vote on Thursday on selling the Hokitika-based company to the Chinese-owned Yili International for $588 million.
The six former shareholders said they are owed more than $11m in exit payments, but the co-operative and the likely buyer have rejected their claim.
Under Westland's rules, departing shareholders may have to wait up to five years and the group's members have been told it could be 2023 before they are paid. The rule was designed to prevent pressure on the co-operative's finances if a lot of suppliers left.
A spokesperson for the group, Pete Williams, said assuming the sale goes through the rule would be irrelevant, but the Westland management and Yili are sticking with the old structure, and the OIO is one of their last options.
"From a simple farmer's perspective, the OIO is there to look after the interests of New Zealanders and certainly, you know, existing farmers could certainly use that money and reinvest that in their own farms. We thought they would have an interest in us basically providing an interest-free loan to the subsidiary of Yili."
Mr Williams said the group would also look at possible court action.
He said the farmers, who have stayed in the co-operative through all its financial difficulties, have taken the risk and deserve to be rewarded if the sale is approved, but he did not think that should overlook his group.
Mr Williams said he left the co-op because of its poor performance and the way it was being run, but had he still been a shareholder he would vote against the sale because no other options appear to have been considered, and he would have thought some New Zealand interests would have been willing to come forward and buy the co-operative.
Westland Co-op has been in considerable financial trouble in recent years, posting losses, being forced to restructure operations, and paying farmers less for their milk than other major dairy companies.