Farmers lash out in battle for Richmond

By LIBBY MIDDLEBROOK

Farmer holding company Richhold has taken another swipe at Southern meat processor PPCS, asking for more details about the way the Dunedin-based firm bought its initial shareholding in Richmond.

Formed by Richmond shareholders earlier this year, Richhold is trying to gain control of Richmond through a one-for-one share swap to block PPCS from gaining more than 50 per cent of company shares.

PPCS holds about 30 per cent of Richmond.

Last month, Richhold said PPCS had not complied with Richmond's constitution when it purchased its initial shareholding in Richmond last year through Maori investment company HKM Nominees, which holds 33 per cent of Richmond.

Richhold claims PPCS breached the constitution when it failed to notify Richmond shareholders of its intention to buy into HKM and has demanded a board inquiry.

In the past two weeks Richhold is understood to have presented another, more detailed, report to the board featuring times and dates, strengthening its case against PPCS.

It is understood that Richhold's latest report also has the backing of a legal opinion from a QC.

"It's difficult to see how they (PPCS) can comply (with Richmond's constitution) with this latest report," said a Richmond source.

While PPCS has disputed the allegations, Richhold has also questioned the timing between when PPCS bought into HKM Nominees and when it notified Richmond shareholders and the board.

Under Richmond's rules, investors are required to notify shareholders in advance of any acquisition above 20 per cent of shares. However, PPCS chief executive Stewart Barnett maintains that PPCS did not breach Richmond's constitution during any of its share purchases into Richmond. He said the company, which is offering to buy Waitotara's 9.3 per cent interest for $1.65 per share, would prepare a detailed report this week rebutting Richhold's allegations.

"As far as we're concerned we're advising that we believe we've done everything correctly," he said.

"We've received some correspondence from Richhold that we will be replying to within the next two or three days," he said.

Mr Barnett said Richmond had a case to answer as well under Richhold's allegations as it was Richmond's responsibility to run an accurate company share register.

Meanwhile, Richmond chairman Bob Croker, who last week said that PPCS had complied with Richmond's constitution, yesterday said the issue would be discussed by the company board this week.

If PPCS is found to have breached the company's constitution it could be forced to sell its interest.

Richhold was set up by Richmond shareholders James Aitken, Tom Crosse and John Cullwick.