SFF deal concerns shareholders

The Dargaville meat works is among 18 processing facilities with more than 7000 staff which Silver Fern Farms operates throughout the country. Silver Fern Farms is a farmer-controlled co-operative with more than 6200 ordinary shareholders and over 16,000 farmer partners. Photo / John Stone

Concerned Silver Fern Farms (SFF) shareholders in Northland - where the company operates the meat works at Dargaville - are waiting to see if the $261 million joint venture between SFF and leading Chinese meat processor Shanghai Maling starts expiring today.

An SFF board decision last week to delay a special meeting due to be held in Dunedin on July 11 has been criticised by shareholders opposed to the sale, which they've dubbed Shexit.

And New Zealand First leader and Northland MP Winston Peters is questioning the Chinese firm's commitment to the deal, which he says is "shonky" and "should fall over".

His party's Meat Industry Restructuring Bill, which aims to restructure the red-meat industry in one co-operative owned by farmer shareholders, is in a ballot of members' bills to take place in Parliament today.

Shexit group spokesman John Shrimpton said SFF had announced "an extension to the June 30 date for receiving Overseas Investment Office (OIO) approval is in the process of being finalised" and deferment of the special meeting date to accommodate "the new information" rang hollow.

"It's incredible the company persists with giving the impression OIO approval is somehow subject to a deadline when that's not the case," he said.

"Leaving aside its presumption, the reality is that Shanghai Maling and SFF agreed last year that their documentation would expire if the proposed sale was not completed by June 30.

If both parties were keen to continue they would already have prepared for this contingency and agreed on an extension.

"The fact that SFF missed its own deadline when it was unable to send out its notice to shareholders calling the special meeting previously set for July 11 strongly indicates Shanghai Maling is not so interested in playing ball."

Mr Shrimpton said an article published in The Australian newspaper on Friday suggested Shanghai Maling's parent Bright Foods "may have walked away" from the transaction.

"Given it has been reported that the OIO is awaiting a reply from Shanghai Maling and that no extension was mutually agreed with SFF by the end of last week, I wouldn't be surprised if the documentation is left to quietly lapse," he said.

Winston Peters said the OIO needed to make sure it was not wasting its time on a deal that may now be off.

"This shonky deal is bad for the co-op's farmers, its workers and for New Zealand and would be a lucky escape. It was a deal National welcomed without regard for the red meat farmers and workers in the provinces," he said.

"It should fall over, and a number of Silver Fern's board and senior management have to go. They've obfuscated the co-op's true financial position and led their staff and shareholders on a massively wasteful and damaging wild-goose chase.

"Chilled meat exports to Asia are a game-changer so Silver Fern Farms may now have a chance to row its own boat. Under Chinese control the future would have been bleak; being a conglomerate's business unit providing unprocessed meat at the cheapest price."

Mr Peters said it was time for SFF farmers to rise along with the Alliance Group and demand a change in direction so they got a fair slice of the action.

Tangiteroria farmer Bob Steed said SFF shareholders were concerned because the company had not provided them with as much data about the SFF joint venture proposal as Shanghai Maling received.

"We got 120 pages of information and the Chinese investors got 540 pages."

Shareholders were also unhappy over the SFF board deciding the Shanghai Maling proposal wasn't a major transaction and therefore SFF didn't need to call a special shareholder resolution to approve the deal.

Delaying the July 11 special meeting was also a concern.

Mr Steed supports the Meat Industry Excellence organisation, which he said had withdrawn from the SFF joint venture dispute, but still had members committed to improving meat industry returns.