Fonterra's bold plan to gain a second mandate from farmer shareholders for its controversial Trading Among Farmers scheme has taken a body blow with the resignation of the Fonterra Shareholders' Council chairman, Simon Couper.
Couper's resignation followed a majority vote by the council in support of the TAF proposal, a view which clashed with his own and made his position untenable, he told BusinessDesk.
"I respect the council's decision," he said, but was not personally convinced that the scheme would meet the bottom line objective of securing 100 per cent ongoing farmer ownership of Fonterra in perpetuity.
"One hundred per cent is 100 per cent and in my view, we didn't get there," he said, after the council completed a due diligence process on the detail of the TAF scheme, which will go to a special shareholders' vote on June 25.
Fonterra chairman Henry van der Heyden called the vote last month, despite farmers voting in principle to support TAF two years ago. He cited a voluble minority of opponents as the reason, saying international partners were becoming concerned as to whether farmers supported their board and senior management.
Couper declined to elaborate in detail on the reasons he believed the TAF scheme proposals failed to address farmer concerns that 100 per cent control of New Zealand's largest multi-national business be protected.
The shareholders' council represents the interests of the cooperative's 10,500 farmers and was withholding its view on the TAF scheme while it received final details of its construction.
"I've made no secret that the milk price and fund size are the key drivers," Couper said. While the Fonterra board had "gone some way in alleviating other concerns", they had not, in his opinion, gone far enough."
"I had told shareholder in print several times about yow 100 per cent ownership and control was something I stood for and believe that we needed to deliver," he said. "I do not feel the controls are in place to deliver that."