CFM proxy battle begins in earnest

Press, 30 May 1981, Page 18

CFM proxy battle begins in earnest

The hottest proxy battle for many a year in New Zealand company history began in earnest yesterday as Canterbury Frozen Meat, Ltd, shareholders received in the mail two sets of documents soliciting their support.

The CFM directors sent out a three-colour printed brochure urging shareholders to say “no” to the attempt by the Primary Producers Cooperative Society to unseat two CFM directors, Mr I. E. O, McKellar. the chairman, and Mr R. M. Satterthwaite and replace them by two of its own directors, Mr J. 0. Acland, and Mr I. H. Jenkinson.

In a six-page booklet, also in colour, the PPCS urges CFM shareholders to support its attempts to “make CFM stay in main stream meat processing for maximum profit opportunities.” Neither side advances any new argument, but reiterates its earlier statements. The CFM directors say that the attempts by PPCS to use its controlling interest in CFM to influence the meat processor's future direction is an untenable situation, and would lead to a reduction in competition. PPCS directors say that they cannot agree to the control of CFM by Fletcher Challenge — which recently purchased 10 per cent of the CFM capital — at the expense of South Island farmers.

CFM shareholders will de-

cide at- a special meeting called for June 16 which way their company will go. They will be asked to vote on seven resolutions.

The first two are proposals aimed at restricting the issue of shares. PPCS wants total restriction. The CFM directors point out that no New Zealand public company has such a restriction, and they propose in turn, a restriction to 10 per cent of the issue capital in any one year. Resolution 3 aims at protecting the interests of the majority of shareholders and recommended by CFM directors.. PPCS would be entitled to appoint up to three directors in proportion to their shareholding in CFM, but would have no further right to vote in the appointment or removal of other directors.

These three are special resolutions. Resolutions 4 and five are proposals to change the number of directors on the board. The CFM proposal (Resolution No. 4) will be put only if Resolution 3 is passed. The CFM directors propose a nine-man board which would increase to ten with a managing director. Such an appointment would be included in the board’s consitution of eight members proposed by PPCS (Resolution No. 5).

Resolutions 6 and 7 are PPCS proposals to remove two present directors, and to replace them with two PPCS nominees.