Fonterra's biggest shareholder Colin Armer says he's taken his long-simmering worries about the company's books to the Financial Markets Authority because he's angry.
He's angry on behalf of the dairy cooperative's 10,000-odd shareholders, who he says have had $4 billion wiped off their balance sheets in recent years.
He's angry with the "inept" Fonterra Shareholders' Council, which should have held the company, its directors and "out of control" management to account.
And he's angry at auditor PwC, which he's told the FMA, has "badly let down" shareholders.
Armer said he decided to make the complaint to the FMA following a recent "private" meeting with Fonterra chairman John Monaghan and chief executive Miles Hurrell.
The former Fonterra director is scathing about the shareholder representative council, which costs farmer-shareholders more than $3 million a year to run. He said it hadn't monitored Fonterra's performance, capability, leadership and succession as it should.
Armer said the council is "conflicted".
He said he's "regularly" raised his concerns about how Fonterra's assets have been valued and audited with current council chairman Duncan Coull, but "they've been dismissed from what I can see".
Armer's complaint to the markets enforcer follows last month's announcement by Fonterra that it anticipates having to make writedowns on assets and accounting adjustments totalling $820m-$860m for FY19 and may declare a loss of $590m-$695m when it reports on September 12.
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"They're cleaning house right now. Why not one, two, three, four years ago?"
Armer said because of the "silence" of council leaders and Fonterra Shareholders Fund chairman John Shewan - Armer is also a FSF unit holder - "as the largest shareholder I felt I had to do something".
He claimed the council leadership was conflicted because "too many are eyeing a place on Fonterra's board of directors in future", noting chairman John Monaghan and his predecessor, the late John Wilson, were former councillors.
"They're too busy dealing with the small stuff in the bowels of the business and being courted by the company, especially with overseas trips looking at markets which I think is stupid."
Council chairman Duncan Coull, who is stepping down at the November annual meeting, vigorously rejected Armer's criticisms and claims.
He was not aware of Armer's complaint to the FMA.
Coull said Armer had emailed him after FY18 annual results with concerns around the audit process.
"The council as part of its monitoring function meets with the auditors as we will be doing in two weeks time. We do that annually - post the annual results."
Did he act on Armer's concerns last year?
"Any concerns haven't been dismissed. We have a process we go through every year to understand key audit matters. The council doesn't have a role to speak to auditors throughout the year."
Coull said once the auditors had signed off on Fonterra's books the council's role was to understand what the auditors had looked at and how they arrived at their decision.
"The auditors make judgements every year based on interactions they have with the business and the carrying value of assets based on forward-looking projections of discounted cashflow. That is the discussion we have.
"We don't make a decision on the carrying value of those assets. It's not our role."
Coull laughed at Armer's claim the council was conflicted.
"We haven't been overseas for a couple of years. They have in the past through induction, better to understand the Fonterra business which has been a legacy for 17 to 18 years.
"I would strongly refute the claim regarding councillors eyeing directorships. That argument is quite flawed. It is not the board of Fonterra that elects councillors to the board, it's the Fonterra shareholders themselves."
On Armer's claim the council leadership was "inept", Coull said it wasn't for him to respond to.
"That's Mr Armer's opinion. It's not for me to explain. And it wouldn't be right for me to comment - let's see what the FMA has to say. Why would I want to get in the way of that process?".
Coull rejected Armer's claim the council had been quiet.
"The council has a responsibility to report annually to our shareholders. The annual results have yet to be announced and at such time the council will come back to shareholders.
"Council has been very active. You only have to look at work we've done last year, prior to last year's results, on the performance of Fonterra since inception.
"This is not a story of the last two years. This is a story of Fonterra and its inability to get any real traction for the past 17 years."
Coull said the $4 billion wiped off shareholders' balance sheets had been in the "last two years" not four years, as Armer stated in his FMA complaint.
"That represents 5 per cent of dairy farm equity in New Zealand - it's huge," said Coull, noting he had raised the fact of nearly $2b of farmer wealth destruction in the council's FY18 annual report.
What about the other $2 billion?
"That's my point exactly. That happened in the last financial year (FY19). We will report on the last financial year when we get to the end of the financial year."
Fonterra is currently holding elections for farmer-directors and shareholder councillors.