August 26, 2008

 

AWB says no compensation to growers for yielding control of board 

 
 

AWB Ltd Tuesday (August 26, 2008) rejected a bid by a farmer lobby for A Class, or grower, shareholders to be financially rewarded for yielding control of the board of the agribusiness to B Class, or economic, shareholders.

 

Late Monday, the Western Australian Farmers' Federation said AWB wanted growers to give up control of the company without compensation, despite their combined holding being estimated to be worth in excess of AUS$100 million.

 

"If growers are going to give up control, they should be adequately rewarded for that loss of control," the federation said in a statement.

 

But Melbourne-based AWB has rejected the federation's assertion, with spokesman Peter McBride saying the company's constitution states that A Class shares have no value and are to be freely redeemed.

 

"Only B Class shares are listed on the ASX and have a monetary value," he said by telephone.

 

Further, the federation has a conflict of interest in opposing constitutional change for AWB as it has a commercial alliance with a competitor of AWB to market grain, he said.

 

AWB's proposal to redeem A Class shares as part of wider changes to the company's constitution was put to a shareholders meeting on Thursday. This meeting was adjourned until Sep. 3 to ensure there is sufficient time and opportunity to increase participation by A Class shareholders and secure a decisive result for the proposal, Chairman Brendan Stewart said at the time.

 

Stewart said 74.7 percent of A Class shareholders who voted prior to Thursday's shareholder meeting favoured the proposed change, falling just short of the 75 percent needed before the change can occur.

 

Votes lodged by Western Australian growers before Thursday's meeting showed 72 percent supported the company's plan to change its constitution, AWB's McBride said.

 

"This just shows these guys are out of touch," McBride said of the federation's move.

 

The dual class shareholder structure was put in place prior to AWB's listing on the stock exchange in 2001 to ensure growers' interests were looked after during AWB's monopoly over wheat exports, which ended June 30.
   

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