Angry shareholders have called for heads to roll at the top of Westland Milk Products, with a pending vote of no confidence in the board apparently enough to trigger the resignation yesterday of chairman Matt O'Regan.
Chief financial officer Kim Wallace is also going, and this follows the replacement of Rod Quin as chief executive by Toni Brendish.
Mr O'Regan announced his resignation both as chairman and director in a press statement yesterday.
Westland Milk Products today reported a net loss after tax of $14.5 million, but assured that it remains compliant with its banking convenants.
Chairman Matt O'Regan said it had been a tough year and the final net average cash payout of $3.88 a kilo of milk solids was disappointing and below break-even point for farmers.
He said he would leave in March to give Westland "continuity of governance" under the new chief executive and so the board could "identify and plan its future governance needs".
Mr O'Regan today declined to outline reasons for his departure, saying shareholders were entitled to hear first at the co-operative's annual general meeting in Greymouth next month.
On Monday, Kokatahi farmer and former Westland Milk Products chairman Terry Sheridan lodged a vote of no confidence in the board to be tabled at the annual general meeting.
He said today that was the real reason Mr O'Regan was resigning.
"I wanted to put the pressure on the board to get the chairman to resign," Mr Sheridan said. "It was my right to move a vote of no confidence in the board."
Chief executive Toni Brendish confirmed today that chief financial officer Kim Wallace had just tendered her resignation.
Mr Sheridan said a recent opinion article by former director Jon Sullivan, of Hari Hari, had "nailed the mess" Westland Milk was in, particularly the poor shareholder relationship and lack of transparency.
"I would put it more bluntly, to be honest. One of the things a board of director does is to leave the company in a better position. Not one of them can put their hands on their hearts and say that ... therefore the buck has to stop with them."
The West Coast company was now "far behind the eight ball" compared with other dairy co-operatives, and that was a far cry from its greatness a decade ago.
"It's due to a board who rubber-stamped everything," Mr Sheridan said.
However, he believed that with the arrival of new chief executive Ms Brendish, who was "very receptive", and with good candidates standing for the board this year, it would now be possible to make the co-operative "great again".
"Dirty laundry had to be hung out because the public need to know how we have suffered," Mr Sheridan said.
"This isn't about bashing the staff. This is about the staff being aware how bad the situation is on farm; and we support staff, but I would expect them to support us."
Shareholders had endured the line for too long that their low payouts were outside the board's control, at a time when the company kept spending, and that was down to the board.
It was critical now that shareholders asked questions at the AGM - including getting to the bottom of the shareholder equity sinking to 42%, he said.
"I believe the equity in the company is lower than what has been stated. It's absolutely critical that farmers at the AGM, instead of sitting there, actually get up and speak on the situation and how they feel."
Farmer shareholders had been reluctant to say anything due to "bullying" with some farmers allegedly threatened with having their milk collection stopped, which Mr Sheridan said was unacceptable given the farmers owned the company.
- Greymouth Star