Small Richmond shareholders could block PPCS

Small Hawke's Bay farmer shareholders could block moves by South Island-based PPCS for control of Hawke's Bay meat company, Richmond Ltd.

In a reserved decision released by the High Court at Christchurch on Friday, Justice Young ordered that PPCS must either make a successful takeover for 90 per cent of Richmond shareholding or lose all influence it has in the company.

The court also ordered PPCS to forfeit 6.9 million shares worth an estimated $10 million and pay costs to the plaintiffs.

Richmond's share price rose 50 cents, or 26 per cent, today to $2.40, in anticipation of a takeover offer from PPCS.

A group of 10 small shareholders, led by Napier solicitor Robin Bell, which initiated the legal action against PPCS, says it will react appropriately to whatever PPCS does.

There were also signs that the farmer group Richhold, formed two years ago to block PPCS's moves against Richmond, could be reactivated.

Mr Bell's group, which battled for two years to get disclosure of PPCS's share dealings before the court, said it was extremely unlikely PPCS would get the 90 per cent shareholding needed for a full takeover because of its catalogue of untruths and lies.

Mr Bell's group began expressing concerns about PPCS's moves for control of the company two years ago and members were galvanised into action after Richmond's annual meeting in late December.

In February Mr Bell's group approached directors and said it planned to take action.

Mr Bell said Justice Young's decisions was a vindication of his group's stance.

He urged PPCS to get on and accept the decision. He felt it was extremely unlikely PPCS would get enough shares to meet the takeover provisions of the Companies Act.

"The actions of PPCS so far have not made them many friends with shareholders. They have encouraged resistance by their own actions.

"When they read the two decisions a lot of farmers are going to ask 'do we want our company run by people who were so roundly criticised by Justice Young?'."

The court found PPCS's dealings had been behind a facade of untruths and repeated gross breaches of the law and Mr Bell said it left the company with a credibility problem. The next move was up to PPCS and it had some interesting and difficult decisions to make.

"My group will be watching their moves closely and will react appropriately to whatever it does," Mr Bell said.

He also said that no matter what his view was others would have to make up their minds if PPCS made a takeover offer.

However, he has urged shareholders to read both judgements before they make any decision on any PPCS takeover offer and if they could not get a copy of them to see him.

Richhold spokesman, former Richmond chief executive John Foster, said the members of the group were considering their next move.

"If PPCS made a formal takeover offer we will take appropriate action," he said.

- HAWKE'S BAY TODAY