Thirty-Nine The Last Supper 1987

CHAPTER THIRTY-NINE

The Last Supper

Discontent simmering beneath the surface was slowly reaching boiling point as shareholders became aware of the enormity of the financial difficulties facing the company. To make things worse, late payment for stock sales and charging interest on overdue accounts were not the actions of the company as they knew it and this was beginning to irk some of the more discerning clientele and they were now wondering where the management and board of directors were taking the company and what the long-term prognosis was. Lack of detailed information had been one of the main topics of discussion at the recent annual general meeting and now, with a genuine concern that the organisation may be lost to the Taranaki farming community, a number of small groups came together who felt that they should take the destiny of Taranaki Farmers into their own hands. A series of events took place which turned what was becoming a slippery slope into an abyss of unknown dimensions.

Despite relative isolation, rural communities have always come together when Mother Nature displays the worst side of her character or man-made issues affect the quality of lives. Challenging adversity is inherent in all who live and work on the land. The continuing viability and state of their own provincial stock and station agency was of deep concern to all farmers and families who had longstanding connections with the organisation. After all, it had 8,500 current shareholders, a loyal staff of over 400 and many hundreds of former employees. A vast number of families throughout the province had proudly held the Farmers’ Co-op flag high through good and bad times and were not going to surrender it now. Shareholders, staff and even a few past directors were now conspiring to fight the good fight. The bush telegraph was effectively rousing people sympathetic to the cause, who might now influence the outcome of the negotiations to sell the company.

Christmas 1986 arrived and the events of the past week since the annual general meeting had crystallized the resolve of a few shareholders to do something. Three Waverley shareholders with strong personal affiliations through their association in a number of local enterprises and organisations, namely P. R. Pedersen, R. P. Richardson and B. Train, had, in the light of Taranaki Farmers’ decision to sell all or part of the company to Elders Pastoral Ltd, informally undertaken a preliminary study showing that the purchase of the livestock and wool-broking business currently operated by Taranaki Farmers was a viable proposition and had collectively discussed the possibility of making an offer to the company. If the stock division was going to be sold they would attempt to buy it and keep it in the province. Following discussion with staff connections in the stock department, the Waverley group’s proposal was passed on to director Preston Bulfin, who invited Paul Pedersen, a personal friend, and Brian Train to attend a meeting at his office on Boxing Day. A frank discussion took place between the three men and later in January a further meeting was arranged between Messrs Pedersen, Train and Richardson, Preston Bulfin and Derek Evennett to further explore the trio’s proposition.

By February 1987 discussions with Elders Pastoral and the maverick Waverley group were now consuming most of the board’s attention the chief executive was also continuing negotiations relating to the sale of unwanted sections of the company’s assets. Discussions with Progressive Enterprises in relation to the New Plymouth property continued; and they were also showing interest in the Hawera and Stratford branches for a ‘Three Guys’ operation. Westpac Bank was seeking buyers for the premises and three other parties were also interested in the property. FCOS Finance Limited had six possible suitors and Crown Finance had offered $2.5 million which was not acceptable. In connection with the appointment of a statutory manager, Messrs Bulfin, Evennett and Mr Tait from Arthur Young Management Consultants had met with Colin Moyle, Minister of Agriculture, to present submissions in relation to the company’s position and their reaction to the appointment of a statutory manager. Although the Minister’s reaction was as expected, he was ‘disturbed to hear that up to 100 farmers could be forced to sell if the Farmers’ Co-op failed’. Meetings were also held with Messrs Friedlander, Bolger and Young in New Plymouth to update them on the position of the company and the avenues open for consideration. Westpac and ANZ Bank had also been kept in the loop on the various negotiations taking place. The Farmers Trading Company had also been approached regarding their possible interest in the Hawera and Stratford branches.

The purchase of the livestock, wool, real estate and farm supplies divisions had been approved by the Elders board and was now only dependent on agreement of the Commerce Commission and Taranaki Farmers’ own shareholders for finalization. Two further meetings had been held with Elders Pastoral Limited regarding staff positions and the number to be retained. Mr Evennett had shown his displeasure regarding certain aspects of the purchase of the company’s business in the northern area; the limited exposure in the area would not generate the goodwill required. A special meeting was arranged for Elders to present to the board the reasons for the limited offer, and to enable the board to express concern about the effects of the limited offer on market share in the northern area. Mr Veitch asked whether the company had any policy on continuing business after the Elders purchase of some branches, and Mr Evennett advised that Taranaki Farmers had not competed with Elders in the towns where they were established.

On the matter of the Waverley group, the chief executive reported that representatives of Waverley shareholders had been informed of the company’s position and three meetings had been held. They had requested that the divestment of assets be altered in the order of disposal, with the New Plymouth property and business being first, other branches following, and the livestock and wool business last. This was so that the company would know what remained in the way of shareholders’ funds. The Waverley group would then make a cash offer for the business. The board felt that it was important that the Waverley group was on the side of the directors at the Extraordinary General Meeting, stating: if the Directors’ recommendation is put to the meeting and this group raises an alternative, it would create chaos at the meeting and lead only to the destruction of the company. The Waverley shareholders recognise this point and have stated that this is not their intention. The letter from the Waverley group to the directors dated 4 February 1987, detailed their proposal:

The Directors, Taranaki Farmers, Hawera.

Dear Sirs, We thank your representatives for giving their time to discuss the proposals of our group and in response to their suggestions, set out below [is] our position relative to the present proposed disposal

of the company’s assets. It is our group’s grave concern that the present proposal for the sale of a portion of the company to Elders Pastoral Ltd. would not be in the best interests of the farming community.

A preliminary study shows to us that a livestock and wool broking business would still be a viable proposition. (The study was completed by our accountant and commission figures used were confirmed by Mr Evennett as being realistic.)

Our group would therefore be prepared to float a company to purchase the appropriate assets. It is obvious that with the farming economy the way it is at present there would be little chance of our raising cash from that community. However, we are convinced that we would have support for a scheme of offering shares in a company to be formed in exchange for the Taranaki Farmers shares these farmers hold. However, because of the nature of our suggestion all other assets of your company would need to be sold first to establish a value per share to be offered to the existing shareholders.

The asset purchase of approximately $1.2 million could be achieved by the taking over of 1.2 million shares and the contribution of $300,000 of cash. (To this end we have calculated that wool clients alone hold 900,000 shares in the company.) The proposal of course is assuming the shares, after the disposal of all other assets and the payment of redundancies etc., will have a value of at least 75 cents each as we are led to believe. Our proposal should not affect the present Taranaki Farmers ability to sell its tax losses.

For the purpose of obtaining acceptance of our proposal our group would arrange meetings (preferably with the blessing of the directors) of the present shareholders.

We appreciate that the concern of the directors would be that this proposal could not be put in place until all other assets were disposed of. However, we believe that at present the sale of this part of the business will do little to relieve the financial problems the company presently faces. Indeed it would more probably reduce the value of the remaining assets. We have already been assured that the sale to Elders Pastoral Ltd. will not take place: (1) Until the sale of the New Plymouth store has been finalised; and (2) Before the shareholders have given their approval. It is our belief that this alone is not enough and that negotiations should be completed for the disposal of all assets before the relative merits of Elders and our proposals can be evaluated.

In conclusion, we are seeking a change to your apparent priorities of disposal. Yours faithfully, P. R. Pedersen, On behalf of: P. R. Pedersen, B. Train, R. P. Richardson

On 5 February 1987 the Waverley shareholders’ letter was tabled at a meeting of the board and a full discussion of the proposal took place. As directors felt they could not be seen to favour one section of shareholders over another, it was decided the Waverley group would need a firm offer at least equal to the Elders deal that could be put to the shareholders, should they turn down the Elders proposal. Preston Bulfin indicated that if the Waverley offer was at least as good as Elders then directors could explain the two offers to the Extraordinary General Meeting and recommend which deal to accept. He felt the proposal in its present form was not acceptable as the board would need a firm offer of purchase to change the present planned programme. Essentially no further contact was made between the board and the Waverley group, except Mr Pedersen indicated that, ‘financially they would not be able to go ahead with their proposal unless the Elders deal was substantially changed’.

While the contingent of Waverley shareholders in the southern part of the province were pitting their wits against Taranaki Farmers in an attempt to salvage at least a part of the company’s operation, unbeknown to them Mr Paul Harris and Mr Roy Lithgow, former employees and accountants of the company, had an unscheduled yet fortuitous meeting with one of Farmers’ Co-op’s

loyal and long-serving employees, Colin Morrison, on a Stratford Aero Club sightseeing train trip to Taumaranui on Sunday 1 March 1987. Colin had recently been appointed retail manager for the entire group, with the task of assisting with the sale of assets, closing down the motor division and negotiating the many redundancies planned by the board. It was without doubt the most unpleasant and traumatic experience of his long association with Farmers’ Co-op, as he had worked closely with many of the people involved. Colin recalls: ‘I can remember the days sitting in the board room planning redundancies around the country. It was awful, I remember going to New Plymouth one day and making forty people redundant.’

Other than ten years sharemilking he had spent his whole working life with Farmers’ Coop. As a 13-year-old third-form pupil at Stratford High School he began a milk run starting at 4:30am seven days a week because his father had passed away and money was in short supply in the family. One of his school mates swept floors at the Stratford branch of Farmers’ Co-op and was leaving, so Colin took over his after-school job and swept the floor for three years. After leaving school at the age of 16 he approached the Farmers’ Co-op manager, Tom Molesworth, regarding the possibility of a permanent position. His ambition was to be a stock agent, but that was not to be. He recalls:

In the process of sweeping the floor – you would see these stock agents driving around in their Austin Westminster’s and I thought – I want a bit of this action! So I was in the main office, the office boy for a year, and then I went down to what we called ‘the merch office’, which was in the shop and I had my sights set on being in the stock department. But Mr Molesworth was not having a bar of it – it must have been about four years I think. Then I was told that the merchandise part of the business was where I was going to be heading. I was sent to Eltham as a ‘merch. rep.

He was disappointed but after all he was only 20 years of age. With a job and an Austin A60, what more could a young man want! Despite being well respected and destined for a long future with Farmers’ Co-op, unfortunately the bottom line was that his dream of being a stock agent did not seem likely to be realized, so with his wife, Judith, he headed north and went sharemilking in the Waikato. Eventually he received the call he had been waiting for from district manager Peter Western offering him a position as stock agent based at Stratford, servicing Whangamomona, Tahora and Kohuratahi which he gladly accepted, eventually being appointed district manager for Stratford, Eltham, Kaponga and Ohura and later area manager Hawera. At last he had realised his dream. It was a huge step, however, and he had only been in the position for a short period when in 1985 the new general manager, Derek Evennett, appointed him to the position of retail manager. He was now involved in divesting the company of unwanted assets and, regrettably, staff. Derek Evennett met with Colin one evening and explained the company’s proposal to sell to Elders Pastoral Ltd. with Colin’s considerable knowledge of the shareholders, their philosophy and loyalty, he knew instinctively that they would not take it lying down and said to Mr Evennett, ‘the shareholders won’t wear it’.

The decision had been made and the outcome seemed inevitable. Throughout this extremely demanding and testing time Colin was under considerable pressure and working long hours on what seemed an endless and fruitless task. Judith was only too aware of the difficulties Colin was facing on a daily basis and recognising the need to take Colin away from the problems, at least for one day, she decided to give him a surprise by ‘conning him’ into taking a day train excursion from Stratford through the eastern bush country and over the Raurimu Spiral through to Taumaranui. The train was full of local people who knew each other. Not long into the journey he met a couple of former work mates, Paul Harris and Roy Lithgow, both still reeling from reading a large front-page newspaper report on Tuesday 24 February that Taranaki Farmers planned sell what they considered ‘their old Company’ to Elders:

TARANAKI FARMERS FOR SALE BIG LOSSES FORCE FIRM TO QUIT Taranaki Farmers has sold its stock and station business to Elders Pastoral – part of a multi-national Australian-based farming group.

The multi-million dollar sale, yet to be ratified by shareholders, is part of a plan to sell off all of the company’s assets. Neither company would reveal the sale price. A statement issued by the company’s directors last night said the size of the losses sustained last year and the projected losses for the next few years meant Taranaki Farmers could not continue its present business. …

It had been a ‘black week for jobs’ in South Taranaki. Hard on the heals of the Taranaki Farmers announcement to sell to Elders, with the retail outlets in Hawera, Eltham, Kaponga, Patea and Manaia along with other property and interests in Taranaki up for sale with the possible loss of several hundred jobs, Kiwi Co-operative Dairies Ltd were about to phase out the gouda cheese plant at Whareroa Road, Hawera and install new equipment to manufacture butter, casein and powder, a plan that would result in 91 jobs also being lost to the region. Venn Young, Member for Waitotara, was so concerned for the district that he raised a question in the House of the Minister of Social Welfare on the number of unemployment benefits currently being paid from the Hawera Office of Social Welfare. Unemployment had in fact doubled in the Hawera district under a Labour Government, and there was more to come.

Feelings were running high and the subject of Farmers’ Co-op’s imminent demise was a topic on the minds of most everyone in Taranaki. As the most prominent trading organisation in the province, almost everyone had some connection to it – as shareholders, clients or as staff. Perceiving Colin as someone close to the action prompted Roy Lithgow and Paul Harris to seize the opportunity on the train to discuss the matter with him to hear his personal view on how the problems affecting the company could be remedied. Colin was passionate about the survival of the company and the travellers hung on every word he said. His words of wisdom doubtless provided Roy and Paul with inspiration and hope. These two gentlemen were highly motivated, well known identities, with good credentials. This meeting later seemed almost pre-destined and it was this shared journey that was the catalyst that brought Paul and Roy together to embark on yet another journey that would have significant wide-ranging and long-lasting consequences for the company’s shareholders, staff and for Taranaki as a whole. They sat together throughout the train ride with one eye on the scenery, but keenly focused on the conversation. The fact was that no formal organised group had yet emerged to oppose the sale of the company to Elders. The collaboration between Paul and Roy to take up the matter was born out of this train conversation between the three men. Paul and Roy knew each other well, and both had past affiliation and strong affection for the company. There was no time to lose. A number of phone calls between the two resulted in the beginnings of a plan of attack. They also heard about the group in Waverley who were working on some alternative possibilities.

Paul Harris and Roy Lithgow met on a number of occasions. They only had just over four weeks to formulate any sort of alternative campaign or plan before the meeting on 30 March. Fortunately both the Waverley and Stratford groups had ‘friends’ inside Farmers’ Co-op who were supplying information regarding the issues and events that were taking place. The two parties met in the office of Paul Harris to discuss mutual concerns. It became evident that they had significantly different agendas; the Waverley group wished only to retain the livestock department and possibly the woolbroking section, ‘letting the rest of the company go’. However, as Brian Train said: ‘We were not privy to any facts or figures … We sat with Paul and listened to what he had to say and where he was coming from and what he was going to do.’

The fact was that Paul and Roy ‘had a plan to get the community to overthrow the directors’ intentions’ and after a number of meetings the Waverley group realised: What we were doing was not helping, we were going down two separate roads. It took 24 hours and we were on common ground. Paul, Roy, myself, Paul Pedersen, and Ross Richardson. Then at the eleventh hour before that meeting we brought in Peter Cook and Joe Laird. We joined forces.

The two groups now as one, supported by diverse and influential local connections, quickly formed a formidable alliance to mount a campaign to oppose the company’s proposal to sell. Passionate longserving staff had become an integral part of this institution and vast number of shareholders had much more than a pecuniary interest in the organisation. They were not going to stand by while what they considered to be the solitaire in the crown of Taranaki’s co-operative movement was disenfranchised and the legacy of over one hundred years of trading lost forever. The highly parochial guardians who had championed this highly esteemed old enterprise were not going to let go without a fight.

Communicating with shareholders and sympathetic staff was the first task and there was no time to waste. One of the key personnel on the inside was long-time employee Frank Bourke, a staunch company man for over 30 years who was known for his forthright debating prowess. He and others gathered the most trustworthy comrades and supporters around them to spread the word as widely as possible to oppose the sale of the company. The combined group used their considerable knowledge and influence to canvass support and publicly voice opposition to the sale proposal by inviting the local press to comment on their endeavours. With the Extraordinary General Meeting planned for 2:00pm Monday 30 March 1987 to ratify the Board’s decision to sell to Elders Pastoral, a decision was made by the opposing group to organise an informal meeting at 10:30am on Friday 20 March at the Athletic Rugby Club rooms at Hawera. Mayor Noel Johnston chaired the meeting and provided shareholders an opportunity to acquaint themselves in advance of the plans to sell the company and the group’s alternative proposals.

Some 450 angry shareholders crammed into the 250-seat clubrooms. It was full by 10:00am and many were left standing in the corridors, stairwell and on the building’s second-floor balcony. Such high numbers had not been expected and as Mayor Noel Johnston called the meeting to order, shouts such as ‘we can’t hear you’ and ‘hold the meeting in the carpark’ were heard. The assembly was in full voice and ready to express their feelings in no uncertain terms. With three minutes to speak, Chartered Accountants Paul Harris and Roy Lithgow outlined alternative proposals for restructuring the company and, following a number of other speakers, including two incumbent Taranaki Farmers directors, a motion was put, ‘that this group of shareholders of the FCOS do not approve the sale of any assets of the Company to Elders Pastoral Ltd’. It was carried by ‘an overwhelming majority’. An executive group of eight, comprising Paul Harris, Roy Lithgow, Paul Pedersen, Brian Train, Ross Richardson, John Cusdin, Don Harvey and Brian Hamerton, was formed to take action on behalf of shareholders if necessary before the Extraordinary Meeting.

Two Farmers’ Co-op directors, Messrs Blyde and Bulfin, attended the meeting, and Mr Bulfin said later that the board would welcome a move by shareholders to raise more capital and save the company: If shareholders came up with $6 million of fresh capital from their own pockets plus the money from the New Plymouth sale, then it would survive, but it would only be marginally profitable … It would be inappropriate to go and ask them to put more in when the return even then would be negligible. Directors of Farmers’ Co-op were in no doubt they were acting in the best interests of the shareholders and there was no alternative. They considered that every possible avenue and alternative had been explored to save the company or part of it and the point had now been reached where to continue with further rescue attempts would only exacerbate the already highly fragile financial

viability of the company. Although the board was recommending that shareholders approve the sale to Elders, with limited choices available to them and the company in such a plight they had made application to the High Court at New Plymouth for a Scheme of Arrangement under Section 205 of the Companies Act. It had, however, never been the directors’ intention to unconditionally commit the company to the sale of its assets or businesses prior to the Extraordinary General Meeting. It was for the shareholders to make the decision, but for the directors the die was now cast and there was no going back.

Paul Harris, a former head office accountant of Farmers’ Co-op, told the Taranaki Daily News that he thought the directors now agreed with the restructuring programme but differed on the figures: We have put forward a financial proposition and we say that $3 million more from shareholders will be adequate. … Obviously if the shareholders decide to contribute $6 million then it would be even better. … If the financial restructuring we propose had been put into place prior to the five months to December 1986, in which the directors advised a net loss of $895,000, there would have been a net profit of $324,000. If the $3million was raised now, the profit next year would be $750,000. In response directors stated that they had ‘already considered such a move but thought it inappropriate’: The directors’ recommendation remains unaltered and it is as a result of exhaustive investigations of the options available to the company over the past 18 months. It is the directors’ sincere belief that the proposed move will be in the best interests of the Taranaki community as a whole. The option raised by Messrs Harris and Lithgow has been previously considered by the directors at length but detailed studies show that even after allowing for the sale of the New Plymouth store, the sum that would have to be raised by shareholders would be at least $6 million. Assuming this course was adopted the studies showed that at best the company would operate at a break-even situation and therefore no return on the shareholders’ investment could be made. Directors considered it would be inappropriate to ask shareholders for additional monies without reasonable assurance of an adequate return.

Shareholders were well primed and ready for decisive action. Directors and executive management had become increasingly aware over the last ten days of March 1987 that their hold on the destiny of the company was tenuous. An executive meeting comprising: A. G. R. Williams, chairman, P. McC. Blyde, R. L. Bremer, J. A. T. McEldowney, B. D. Veitch, D. C. Evennett (chief executive), T. J. Harrop (company secretary), and Messrs P. E. Bulfin and K. A. Horner of Halliwells, the company solicitors, met in the company’s boardroom to discuss the final details relating to the imminent Extraordinary General Meeting. A full and frank discussion took place on the company’s situation including the possibilities for the coming meeting. Preston Bulfin expressed concern at the likely mood of the meeting, given what had taken place at the unofficial meeting on 20 March at the Athletic Club rooms, ‘The company is wanting to be open with any party with a view to eliminating any query with the figures and the amount of additional equity required.’

He also stated that discussions ‘with the Harris group re-offering them access to the company’s sophisticated modelling system had been rejected’. Concern was also expressed regarding a public announcement by the Harris group of the figure they would accept for the New Plymouth building, with the possibility of the disclosure jeopardising the conditional sale contract currently on the building. There was also discussion on the merits of delaying the meeting to allow the Harris group a week ‘to see how successful they would be in raising, the additional capital’. A number of other points were raised, including meeting procedures.

The past six years had been a long and arduous haul, particularly for chairman Reeve Williams, his deputy Peter Blyde and other long-term directors who had been struggling to hold the company together in some of the most turbulent times in New Zealand’s trading history and as well had sought

expert advice from a number of outside agencies and consultants. They had finally succumbed to the inevitable for this ailing juggernaut. With the weight of baggage on the backs of this particular board, there was little chance of them taking the company past this point.

The final meeting of the board, on Thursday 26 March 1987 was under way. The chief executive reported on the various offers the company had received for unwanted assets and reports were also received from Preston Bulfin in connection with meetings he had had with Elders’ solicitors. With Progressive Enterprises withdrawing from further negotiations relating to the New Plymouth property, apparently a new offer from Messrs Grantham and Dunlop was now in jeopardy as details had been unintentionally leaked by Mr Grantham himself to a newspaper reporter and it was said that, the figure publicly announced by the Harris group of $5 million would ‘substantially injure the company’s ability to sell at the higher figure already agreed’. Agreement had been reached on the Inglewood property at the book value of $60,000. An offer of $80,000 for the Stratford garage had also been received. The manageress of the Ohura branch had made an offer to purchase the business and at Waitara, an offer of $250,000 has been received for the building. The Pungarehu manager was showing interest and at Kaupokonui an offer of $10,000 had been received from a group of car wreckers. At Eltham, an offer of $45,000 for the land and buildings had been received and at Hawera a conditional offer of $400,000 had been received. Other matters and properties under consideration were:

Hawera Garage. A $150,000 offer has been received from Moller Johnson. FCOS Finance Ltd. The party interested in this purchase has now withdrawn, not being able to raise the finance required. Banks. The Chairman, Deputy Chairman and Chief Executive visited with the Banks, who are supportive of the Section 205 arrangement. Section 205 — With all the adverse comments and bad publicity the company is now facing a very severe liquidity crisis. Debtors are not paying their accounts, preferring to wait until after the meeting of the 30th, and creditors are squeezing the company and stopping credit.

Even as Taranaki Farmers lay prostrate awaiting a decision by its shareholders on its future, there was still a reluctance to press debtors to pay outstanding accounts and cash for groceries. It was somewhat ironical, with the subject having been a matter of considerable debate for so many years and resisted on the grounds that shareholders would take their business elsewhere if it was introduced, that a director raised the question relating to ‘groceries for cash’ at this juncture, asking ‘whether groceries should be put onto a cash-sale basis now, which is the alternative group’s idea’. The chief executive responded by saying that it was ‘definitely an option and whilst the effect of this has been discussed many times over the years, now would be the time to make the change’. A full discussion took place on the liquidity of the company and events leading up to this Extraordinary General Meeting. Mr Bulfin stated that the company could take a one-page advertisement to explain the position of the company, to be paid for by directors. It was resolved that an advertisement be placed in the Daily News and the Hawera Star at a personal cost to each director of $109.34.

Mr Taylor indicated that the directors can only set out the facts as clearly as possible and take all steps to allow the shareholders to consider them and it would then be in their hands. There was also a problem with the Section 205 documents, but, following advice, despite ‘the slight errors’ it was in order for the documents to be mailed out. The Elders Pastoral Ltd agreement had not been signed. The major bone of contention was the Wanganui debtors. Land & Buildings $1.2m Vehicles & Plant $0.2m Debtors $6.2m Stock $1.0m

$8.6m

Less Credit Balances $2.0m

$6.6m

Less Wanganui Debtors $1.2m

Total $5.4m

All eventualities that might arise out of the meeting were considered, with Mr McEldowney making the point ‘that the directors should conduct the meeting with dignity and not get drawn into personal slanging matches’, and asked as to ‘whether the additional $4 million raised would alleviate the company’s position’. Mr Evennett stated that ‘it would in the interest saving alone, but trading losses would still continue.’

Mr Blyde questioned the board’s stance on resignation if the resolutions were not accepted, with Mr Bulfin stating ‘that the board would resign then’. In summing up the meeting Mr Evennett, chief executive, advised that the trading result for the six months to January was showing a loss for that month of $379,000, which was worse than expected. A large proportion of this loss was attributable to the New Plymouth branch as a result of lower gross profit percentages being achieved. The finale to the board meeting was to set the basic procedural details for Monday’s Extraordinary General Meeting. Voting was to take place by way of a poll. A microphone would be placed in the centre of the hall and those wishing to speak from the floor would be requested to use it. It was also resolved that due to Mr Reeve Williams’ poor health he would welcome shareholders and then hand over to Mr Peter Blyde, his deputy, who would outline the events of the past 18 months, the steps the company had taken to rectify the situation, and what was now required of the shareholders. Mr Evennett would then give a detailed report on the company’s financial situation. Mr Bulfin would also provide the legal background of Section 205 of the Companies Act. The question was raised as to the majority required to pass resolutions at the Extraordinary General meeting and Mr K. A. Horner advised that a two-thirds majority was required to pass the resolutions.

No-holds-barred rhetoric from both sides of the contest continued in the press leading up to the meeting. Spokesman Paul Harris, former Farmers’ Co-op head office accountant and internal auditor was leading the charge, attacking the board’s proposal to sell the assets of the company, stating: If the shareholders vote in favour of the directors’ recommendation, they will be voting in favour of the complete obliteration and liquidation of Farmers’ Co-op. It will disappear off the face of the Taranaki province. … What we are offering is the alternative that with restructuring it will remain intact and trade profitably so long as the company receives the support of its customers, shareholders and staff. In short, Taranaki Farmers’ proposal to sell off the company’s assets could cost shareholders almost all their $11.2 million equity in the business. The intention of the group headed by Paul Harris was to raise $10.5 million to keep the company operating. It was hoped that this would be implemented by raising an additional $8 million capital from a cash issue of shares and the sale of the New Plymouth complex. A further $1.1 million would come from the release of funds from merchandise stock and $1.4 million from restructuring trading operations and reduction of overdue debtors. This would contribute an annual saving of $2.8 million in interest charges. For a five-month period this would mean a saving $1.18 million, which would overcome the loss of $895,000 shown in the directors’ statement. There was also a feeling of concern and mistrust that management and directors may commit to selling the company’s assets before the Extraordinary General Meeting, fears which were unfounded, as we now know. Mr Harris went on to point out that the group did not have ‘an anti management view, we are simply out to save a company that has made a substantial contribution to the development, prosperity and welfare of Taranaki for the past 73 years.’

The full-page advertisement that appeared in local and provincial newspapers on 27 March 1987 with the caption, ‘Unfortunately NO ALTERNATIVE’, with a ‘Message from the Board of Directors’ setting out the current situation and their view that there was ‘no viable alternative’, and that the sale was in the ‘best interests of Taranaki’ and clearly stating the board’s recommendations to shareholders.

Chief executive Derek Evennett confirmed that he and the board of directors would resign if the Elders deal fell through at the Extraordinary General Meeting on Monday 30 March 1987 and with the knowledge that 450 shareholders had recently rejected the board’s decision to sell to Elders Pastoral Ltd, the strength and opposition was now beginning to weigh heavily in favour of the Harris group.

On Monday morning the late summer sun shone brilliantly on the town of Hawera, but the battle lines were clearly drawn. The day of reckoning had arrived. Survival of the company now depended on the will of the farming fraternity of Taranaki, the people who had put it there in the first place. The entire Hawera Community Centre complex on Albion Street had been booked, with public address systems linking the main hall, theatre and other ancillary rooms. Unfortunately chairman Reeve Williams, who had been in failing health for some time, had been admitted to hospital the day before the meeting and was unable to attend as planned. Throughout his entire tenure as chairman he had made a huge personal contribution to the company and at this most critical time his absence was deeply regretted. Despite health problems he had gallantly agreed to continue as chairman throughout this difficult period. Peter Blyde, his deputy, who had provided the board with his unconditional support throughout what had been testing years, agreed to chair the meeting in the chairman’s absence. The incumbent directors had undoubtedly given their best efforts throughout the past decade to extricate their beloved company from its predicament, but without success. This day represented a painful experience for everyone connected with the organisation, whether they were shareholders, staff or directors. Looking back on the achievements of the Society and the glorious past, this was an almost unthinkable dilemma, but the directors were firmly of the opinion that there was no other way forward and had finally recommended to the shareholders the sale of the company.

The directors had initially assembled in the Society’s boardroom at the head office, on Regent Street, Hawera at 12 noon for lunch and an informal discussion before moving on to the Hawera Community Centre. The mood of the meeting was quiet, one of resignation. Gossip throughout the farming community grapevine had been relayed to the directorate and the likelihood of the recommendation to sell Elders being heavily rejected was by now almost a foregone conclusion. As they gathered together, possibly for the last time, there was a feeling of inevitability about the outcome. As they waited, Peter Blyde recalls a comment from a fellow director who captured the significance of the situation with the words: This is the last supper Peter!