KEY POINTS:
Wool growers are watching with keen interest as the NZX and other parties try to sort out the furore over Wool Equities.
The NZAX-listed research company has a strong farmer shareholder base - they got shares as part of the carve-up of former Wool Board reserves in 2003.
The NZX is responding to a complaint from a group of disaffected shareholders which has raised concerns over trading in the company's stock by chairman Richard Bentley and former chief executive Mark O'Grady.
The group has also queried whether Wool Equities has complied with NZX rules on disclosure around a range of transactions. It wants a special meeting to try to oust the board.
Wool Equities says it has complied with NZX requirements. Bentley claimed the group was running a "negative media campaign based on selective information taken out of context" and strongly defended the decisions directors had made.
Meanwhile, a second shareholder group has asked David Petterson of Forensic Accounting Services to help them decide whether to take up an offer to sell up to 8 per cent more of Wool Equities.
The offer to buy the shares is from BioPacific Ventures - owned by Direct Capital private equity and state-owned AgResearch.
Karios Holdings, a company which O'Grady is a shareholder and director of, is making the offer on BioPacific's behalf at 90c a share.
Wool Equities has said it considers that it is for the market to determine the merits of the offer. Petterson's findings - expected shortly - will no doubt play a key role in the market's assessment.
A spokesman for the group seeking to oust the board, John Shirtcliff, said his group has gone ahead with placing newspaper ads asking shareholders not to sell to Karios and to support calls for the meeting.
A report by Shirtcliff has highlighted nearly $300 million worth of Wool Board tax losses in the Wool Equities-owned Wool Board Disestablishment Company (Disco). He said shareholders needed further guidance on whether these losses affected the value of their shares.
O'Grady said he had taken "top-level legal advice" and believed he had acted correctly in taking out an option over Wool Equities shares before he left the company, and through his involvement with BioPacific and Karios.
Shirtcliff has also questioned whether there are any issues of concern about AgResearch being involved with both Karios and in the yet-to-be-finalised purchase of Canesis, a Wool Equities subsidiary.
AgResearch's public position has been that it has no control over BioPacific's activities - apart from being a part-owner - and that it learned about the connection between BioPacific and Karios after it had effectively concluded negotiations with Wool Equities over Canesis.
Shirtcliff's group is edging towards getting the level of formal support required for a special meeting. He said he received a fresh warning last week from the NZX to not speak publicly about details of the complaint while it was being investigated.
The NZX says such confidentiality is standard once a complaint is received and there's no indication of how long its investigation will take. Karios's offer is due to expire on December 13 but may be extended another week.
Merry xmas Mr Goodacre
Zespri's now-less-beleaguered boss Tim Goodacre had something of an early double Christmas present last week.
First, the former Australian Wheat Board manager was cleared by the oil-for-food inquiry into the Iraq kickbacks scandal.
Then Zespri got to announce a jump in forecast kiwifruit payouts to growers, despite continuing problems with significantly higher levels of fruit spoiling this season.
Growers will receive an extra $15.7 million in payments for this season.
Projected returns per tray of green kiwifruit are now up 27c at $7.26, green organic up 19c at $9.09 and gold up 3c at $9.37.
Goodacre said the improvements reflected the success of pre-export checks, which had prevented spoiled fruit getting overseas. The amount of overseas fruit loss had been reduced from a forecast 2.29 per cent to 1.28 per cent. The screening helped maintain prices and sales, and led to the forecast being increased.
Seeka - the country's biggest combined kiwifruit grower and post-harvest company - subsequently boosted its operating earnings forecast for the March 2007 year to between $3.75 million to $4.25 million, up from earlier advice of $3 million to $3.5 million.
The jury's still out on exactly why the extra spoiling has occurred. A report from a review of the fruit losses is due by the end of the year - some 154 submissions have been made by the industry.
Meanwhile, the oil-for-food inquiry's report found that Goodacre's only involvement in relation to contracts with or payments to Iraq was approving payments to a Jordanian trucking firm that was a front for Saddam.
"He approved those payments in the belief that they were legitimate, acting on the assurances of [former head of marketing Charles] Stott," the report found.
Goodacre said it had been "bloody hard" living with an unproven allegation.
He said the inquiry finding was the best result he could have expected and that he still had an open mind about whether he would stay in New Zealand or return to Australia once he finishes at Zespri in March.
It remains to be seen whether any hangover from the accusation levelled at him in the AWB affair affects his career. But at least Goodacre will now have a clean slate from the inquiry to help him on his way.
Supply whines
An anonymous source has provided a copy of a Fonterra letter to repair and maintenance suppliers seeking to formalise relationships through a written contract. But the cost-cutting co-op also sought acceptance of suppliers' commitment to meet Fonterra's "cost reduction target of a minimum of 10 per cent".
The anonymous recipient of Fonterra's overture was not a happy camper. While they had no problem with the co-op trying to cut costs, its approach amounted to "blackmail", they complained.
Fonterra wasn't keen to respond in detail: "Out of respect for our vendors, and for commercial reasons, Fonterra doesn't publicly discuss specific commercial or contractual arrangements."
But a quick poll of a handful of Fonterra suppliers from a variety of industries found all felt the co-op was fairly hard-nosed in its dealings with them.
"The bucket of goodwill towards Fonterra is very, very low," said one. "They're bullies, absolute bullies." Fonterra was the toughest big company he had dealt with by far.
However, another said: "They're a difficult bunch of people but so are most of my customers. It's business, isn't it?"
Dairy farmers facing a lower than forecast payout due to the dollar's strength will probably not be too upset at the co-op being tough in its bargaining.
