Richmond suitors start squabbling

By LIBBY MIDDLEBROOK

The struggle for control of Hawkes Bay meat processor Richmond took another turn this week with Richhold questioning the way PPCS acquired its stake in the company.

A holding company set up to win farmer control of Richmond, Richhold is demanding a board inquiry into the way Southern meat processor PPCS bought its initial indirect 33.3 per cent holding and any further share purchases by the company since last August.

Richhold, which is offering Richmond investors one share in the holding company for each share held in Richmond, has sent a letter to the board demanding an urgent inquiry, a freeze on PPCS' shareholder voting rights and a block on any further share purchases by PPCS.

While Richmond chief executive John Loughlin declined to comment, the board is certain to investigate the allegations.

"We're saying that we did it squeaky clean and by the book so why shouldn't PPCS," said James Aitken, a former Richmond director and chairman of Richhold.

He claims PPCS did not comply with Richmond's constitution because it failed to notify shareholders of its intention to buy into HKM Nominees, which holds 33 per cent of Richmond.

Under Richmond's rules, investors are required to give notice to shareholders in advance of any acquisition above 20 per cent of shares.

Mr Aitken said PPCS simply sent an open letter to shareholders in August advising them that it (with HKM) owned 33 per cent of Richmond.

Richhold also claims that in last August PPCS again broke company rules because it did not directly give shareholders notice of its intention to buy up to 51 per cent of Richmond and is questioning any shares bought since then.

PPCS chief executive Stewart Barnett refused to comment on the detail of Richhold's allegations, but said the company's claims were "factually incorrect" and that PPCS had sought legal advice.

Richhold, which is standing in the market for up to 78.1 per cent of Richmond, mounted its bid for Richmond last month to block PPCS from increasing its shareholding.