SML - Synlait Milk Ltd

[Sideshow Bob]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/362034/333598.pdf

Plenty of pink in the AR to keep Beagle happy......

[BlackPeter]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/362034/333598.pdf

Plenty of pink in the AR to keep Beagle happy......

Interesting. Chair offers the following statement:

We consider it unlikely that an adverse decision at the Supreme Court or subsequent proceedings would result in a materially negative impact on our ability to continue to operate Synlait Pokeno

Just wondering how he would have formulated this sentence if he would know that chances for a unfavorable outcome might be 50/50 or likely?

It well might be just one of these "he would say that, wouldn't he" - i.e. no matter what the chances, this is the only statement he can make without losing his job, but then I am wondering why he is offering this comment anyway without being asked.

Is he waving a red flag?

[Beagle]

Weasel words. I wouldn't trust him to run a chook raffle even if it was for the LGBTQ community. He presupposes to have some understanding of how the Supreme Court justices will rule. That's goes well beyond "arrogant" in my opinion.

[Mel]

Interesting. Chair offers the following statement:



Just wondering how he would have formulated this sentence if he would know that chances for a unfavorable outcome might be 50/50 or likely?

It well might be just one of these "he would say that, wouldn't he" - i.e. no matter what the chances, this is the only statement he can make without losing his job, but then I am wondering why he is offering this comment anyway without being asked.

Is he waving a red flag?

The longer it takes for the Supreme Court to make a decision, the more concerned I get! It does make you wonder what the basis for the Chair's comments are - bizarre statement to make in the AR, without any qualifying comments.

[Leftfield]

..... He presupposes to have some understanding of how the Supreme Court justices will rule. That's goes well beyond "arrogant" in my opinion.

Ssssoooo OK for the Beagle to voice a strong opinion of the Court's likely outcome, but not OK for the Chair???

Surely Shareholders would be expecting an update on the process and the Chair is entitled to offer his opinion.

Best to wait the ruling.

[Beagle]

Ssssoooo OK for the Beagle to voice a strong opinion of the Court's likely outcome, but not OK for the Chair???

Surely Shareholders would be expecting an update on the process and the Chair is entitled to offer his opinion.

Best to wait the ruling.

I see where you are coming from BUT I don't have a vested interest one way or the other and yes the directors do have strong fiduciary obligations to shareholders, (obviously I don't), so unless there is a legal basis that supports his opinion he's actually exceeding his authority offering it. Is he a QC ? I'm not either, (quite obviously), but I don't have fiduciary obligations to act in shareholders best interests at all times and I continue to struggle to understand how building and commissioning the Pokeno plant in direct contravention of an existing court decision is consistent with the board honoring its fiduciary obligations to shareholders ? For all intents and purposes it looks like a massive 50/50 gamble the size of which amounts to the last 6 years total annual profits, (before they announced the FY20 profit)

Its one thing to go to (for example) Sky City and put a few bucks on black or red on the roulette wheel, have a few drinks and have some fun but quite another to place the last 6 years of your income on the outcome of one spin, surely you would agree ?

I genuinely believe if they lose and the consequences to the company are severe the whole board should resign. I do have a morbid fascination with slow motion train wrecks, can't help myself (because there's so many business lessons to be learned for free), and this one is potentially a massive derailment.

Enough already been said on them promoting the planet and people to the same level as shareholders...all without getting consent by way of a special resolution from shareholders but I still really struggle to see how the directors are acting consistent with shareholders best interests.

My sole interest here is to warn others as to the extremely unusual behavior of the directors and to ask if that's really consistent with them minimizing risks to the company and looking after shareholders best interests ? I've done that. If this train wreck badly derails and the directors don't resign then some shareholder activism will be warranted and I am happy in due course if it is appropriate to have a fulsome discussion with our resident super cat at the shareholders association about where to from there.

[Marilyn Munroe]

A question that has puzzled me for a long time. Why are agricultural processing companies in New Zealand so poorly governed?

Recent examples are Fonterra Westland Dairy SYN and Siiver Fern Farms(then PPCS). There are also historical failures which fit this profile.

A vital part of what the participants call the back-bone of the country seem unable to get it right . I would be interested in others views on this.

Boop boop de do
Marilyn

[Sideshow Bob]

A question that has puzzled me for a long time. Why are agricultural processing companies in New Zealand so poorly governed?

Recent examples are Fonterra Westland Dairy SYN and Siiver Fern Farms(then PPCS). There are also historical failures which fit this profile.

A vital part of what the participants call the back-bone of the country seem unable to get it right . I would be interested in others views on this.

Boop boop de do
Marilyn

The 3 examples you cite (apart from Synlait) are all Co-Ops. Or in the case of Westland and SFF, were co-ops but now part or fully owned by Chinese.

As is Synlait already.

[macduffy]

Perhaps it's because producer co-ops focus on payment for production, not on product marketing. Boards have also tended to be predominantly producers, ie farmers.

[whome]

You got it in one macduffy. Dairy farmers know lots about feeding cows and pulling tits. Anything else beyond the boundary fence - forget it. Kerry Dairy in Ireland provides a case study of how the co-op structure hindered company growth until they split production from marketing. Fonterra tried to set up similar here, but took 6 mths just to organise farmer meetings, then got voted down so they gave up. Thank god ATM is not a co-op, or a milk company, but is the NZ version of Coca-cola the worlds greatest marketer.