COMMERCIAL "Directors of Pastoral Holdings should resign"

Press, Volume CXIV, Issue 33433, 15 January 1974, Page 15

COMMERCIAL "Directors of Pastoral Holdings should resign"

Zealand Press Association;

TAURANGA January 11. Ihe greatest service that the original directors of Pastoral Holdings, New Zealand's pioneer corporate farming venture, could do for t he company s shareholders would be to put forward their resignation.

This was stated in Tau-| ranga today by one of the directors of the company who was elected at last year’s annual meeting. Mr D. S. Barnett. of Taihape. Earlier this week Mr Barnett and the other director

-’elected last year, Mr B. S. : Holmes, also of Taihape, an- > nounced they would endeavour to rally the support of • the company’s 1500 shareholders to prevent it taking ■ over Agricultural Industries. , “No great qualities” In Wellington on Thursday the chairman of Pastoral Holdings (Mr D. N. R. Webb! in a reply to the earlier criticism by the two dissenting directors said that initially all directors would act in the long-term interests of the shareholders. But Mr Barnett said today that this had been said before he and Mr Holmes had joined the board of directors; since their election both had been opposed to the proposed merger, he said. “We were not elected to the board for any great qualities that we possess but because of general dissatisfaction of the shareholders with the past record of the board,” Mr Barnett said. Excessive costs “I think it would be fair to say that we have not been exactly welcomed with open arms by our fellow directors. “It was not our intention to go to the press on this issue, or any other business matter pertaining to Pastoral Holdings, but the complete opposition we have met at board level left us with little option,” Mr Barnett said. Pastoral Holdings had a board of seven directors, and last year the company’s administration costs were in excess of $14,000, he said. “A privately run farm of similar size to that owned by Pastoral Holdings would consider an expenditure of $3OOO on administration to be excessive — surely this is a glaring example of top-heavy administration,” Mr Barnett I said.

Special meeting Even at a time when farm-

ing was enjoying an all-time I boom it was not, therefore/! surprising that Pastoral Hold-; j ings could come up with/ only a 6 per cent maiden l< dividend last year, after five■ I years in business, he said. 1 And the proposal that theii

iboard of the merged companies should have four additional directors, as well as appointing a chief executive officer, could virtually .double the already high ad:ministration costs, Mr Barnett predicted. Because of the importance , of the issues involved, Mr Barnett said he considered a H special meeting of shareholders should be called by the full board to enable the ■ stockholders to elect a Pastoral Holdings board of reduced numbers. Holding a baby This had been one of the objectives of himself and Mr Holmes when they were I elected to the board, he said. 1 “I would be prepared to 1 resign from the board and ! offer myself for re-election if' the other directors were pre-; pared to take the same step,” ! Mr Barnett said; in this context he could not, however,! speak for Mr Holmes. “Mr Webb speaks of the j desirability of an association! with the Broadlands group.”; |(lts subsidiary Broadbanks is ,a 70 per cent shareholder in l Agricultural Industries). “But in my opinion the under-! writers were left holding a i baby when the investing public rejected Agricultural Industries as a worthwhile investment and took up only; 30 per cent of the stock.” Success expected It appeared, Mr Barnett j, said, that Broadbanks—saddled with something it did not really want—had looked around for a “babe in the woods,” found Pastoral Hold- 1 ings, and “had come up with the merger answer to get themselves off the hook.” “The expansion and prosperity of Pastoral Holdings j has been delayed, in my ■ opinion, because of mistakes 1 made at board level since j the inception of the com- ; pany. i

! “I can see no reason why the company, in spite of its poor record, could not become a highly successful ■ corporate farmer — without the financial support of the Broadlands groups.” Mr Barin.ett said.