Beef heads for High Court

By DANIEL RIORDAN

Richmond's four-year stoush with rival meat company PPCS is headed to the High Court, less than four months after Richmond urged shareholders opposed to PPCS' effective takeover of their company to accept reality and move on.

Hawkes Bay-based Richmond said yesterday that it had applied to the High Court at Dunedin for a declaration "on matters pertaining to the sale by PPCS of its shareholding in Richmond in July 2000 and PPCS' reacquisition of that shareholding in June 2001".

Richmond chairman Sam Robinson and chief executive John Loughlin were not commenting beyond the bare bones of the legal move, saying the issue was before the courts.

However, the Business Herald understands the move came after Richmond's independent directors were presented with new information on the two deals by small shareholders who have consistently claimed PPCS' success was due to warehousing of its shares.

The same directors had ruled last year that PPCS' deal with the alleged warehouser, Hawkes Bay investment company Active Equities, did not breach Richmond's constitution.

Instead of having its independent directors rule again on the issue, Richmond has decided to throw the issue direct to the court.

Robinson said in a statement that he hoped the court would be able to "resolve once and for all the festering issues between Richmond shareholders".

The saga so far:

In July 2000, PPCS, a Dunedin-based meat co-operative, was forced to divest its 36 per cent stake in Richmond after Richmond directors ruled it had breached company rules in acquiring the shares. PPCS sold its stake to Active Equities.

PPCS returned to the Richmond share register in May last year, acquiring a 17 per cent stake with the aid of a 10 per cent portion from New Zealand's richest farmer, Peter Spencer.

Last July, Active Equities sold 49 per cent of its Hawkes Bay Meat subsidiary to PPCS, thwarting moves by another processor, North Meats, to take control of Richmond.

Hawkes Bay Meat owns about 36 per cent of Richmond and the deal effectively doubled PPCS' stake to about 34 per cent.

Active Equities has given PPCS an option until September next year to buy the rest of the shares, giving PPCS effective control of just over 50 per cent of Richmond.

A statement from PPCS yesterday said the company was "very comfortable with the matter going to an independent body, the High Court".

PPCS chairman Jim Pringle said his company wanted to achieve synergies "that appear to have been overlooked by a small group of Richmond shareholders."