Forty Divine Intervention 1987

CHAPTER FORTY

Divine Intervention

Only shareholders of Taranaki Farmers carrying proof of membership or proxy voting papers were admitted on the day. Officers at the door of the Hawera Community Centre checked each person at entry. The queue was 25 metres long an hour before the meeting and finally, after registrations were complete, nearly all of the over 1,200 shareholders, the largest group ever to assemble at a meeting of the company, found a place within the complex to take part in proceedings. The business of the day was: 1. To approve the sale to Elders Pastoral Limited of the Livestock, Wool and Real Estate businesses of the company together with the stores at Waverley, Opunake and Inglewood, the Hawera farm supplies store, and farm supplies businesses at Stratford and Waitara. 2. To review the company’s affairs and to approve the plan of action adopted by the Directors of the company, namely the orderly disposal of the company’s assets and paying off of the company’s creditors with the aim of obtaining a cash surplus to be ultimately available for the benefit of the Shareholders.

Note: Proxy votes must be deposited at the registered office of the company not less than 48 hours before the time for the holding of the Extraordinary General Meeting.

Directors and executive management attending the meeting were: Messrs P. McC. Blyde, I. D. Adamson, P. E. Bulfin, R. L. Bremer, R. A. Death, J. A. Halton, T. J. Jamieson, J. P. V. Norman, P. A. Murdoch, J. A. T. McEldowney, D. B. Sarten, B. D. Veitch, D. C. Evennett (Chief Executive), T. J. Harrop (Company Secretary).

There was a mood of restless collective power in the audience as shareholders settled down to listen to deputy chairman Peter Blyde go through the formalities of opening the meeting. His first task was to explain that the chairman Reeve Williams was unable to attend and confined to hospital. The board had resolved that Mr Blyde chair the meeting in his absence. He read the notice convening the meeting and welcomed the large attendance, stating it was pleasing to see so many present who were obviously concerned about the future of the company. He then explained the format the meeting would take: (a) It is an extraordinary meeting of which due notice has been properly given. (b) The business to be conducted is special business but is to be dealt with by way of an ordinary resolution. Regrettably there had been a printing error on the voting form and all share holders were asked to amend these forms by crossing out the words ‘special resolution’ and substituting the words ‘special business ordinary resolution’, the requisite majority in each case for the two resolutions to be voted on would therefore be two-thirds.

(c) The Press have been excluded from the meeting and a statement would be issued afterwards. (d) The resolutions will be dealt with in the order shown in the Notice convening the meeting. (e) Once the motion had been moved and seconded any shareholder would be entitled to ask questions or address the meeting. There would be a time limit allowed of approximately three minutes for each speaker or asker of a question, but the Chairman reserved the right in his discretion to allow this limit to be exceeded. A shareholder will be entitled to address the meeting once only but any number of questions may be asked by any one shareholder within reason. (f) Shareholders speaking from the floor were asked to use the microphone provided and to clearly state their names before speaking. (g) No business would be accepted for discussion other than that advertised and all speakers and questioners must keep to the particular resolution that is being discussed. (h) No motion other than those advertised would be accepted by the Chairman except a procedural motion.

Following the deputy chairman’s introduction Mr Barrett of Tututawa stood, objecting to the exclusion of press from the meeting, saying, ‘it was a vital meeting, affecting the company’s future, and those shareholders not able to attend were entitled to be fully informed of events by way of their newspapers.’

Mr Michael Self of Manaia was in full agreement, and it was resolved on a motion of Mr Barrett, seconded by Mr Self, ‘that representative’s of the Press be admitted to the meeting.’

The chairman called for apologies and Mr Blyde extended sympathy to the Williams family and best wishes for Mr Williams’ speedy return to health. In speaking to the directors’ recommendations Mr Blyde stated that the directors wished to outline their reasons for coming to the conclusion to sell the business:

Over the past ten years the company had not generated enough profit and with hindsight it was evident that no dividends should have been paid out. The trading loss resulting for the 1985/86 financial year had been followed by further trading losses each month, and Directors had taken many steps in an effort to keep the Company viable. Sales had been made of unprofitable businesses in the Wanganui area and the company had exited from the motor business. These moves had been made after serious consideration by management, the capital being reinvested in an endeavour to keep the company going. Personnel from Arthur Young Management Services in Wellington had set up a computer model of the company to enable the ongoing position to be closely monitored, and to evaluate the various options available to the company. The base case of the model had proved remarkably accurate in predicting the losses that were going to be incurred. Drastic reductions in stock had been made, debtors had been reduced by up to $6 million, and management views were investigated in an endeavour to further reduce costs. Despite all efforts the Directors had now come to the conclusion that the only option left was the sale of part of the company’s business to Elders’ Pastoral Ltd, and that this would be in the best interests of shareholders and the company as a whole.

The Board had been extremely upset at the suggestion made that all the Directors wished to do was to sell off the company. Directors were of the opinion that the point of no return had been reached and there was no option left other than to sell. They felt that no stone had been left unturned, and that anyone having all the information available would have come to the same conclusion. There were three major reasons why the company has failed: the downturn in trading; high interest rates on borrowings, which are beyond the company’s control; and insufficient equity capital.

The Board had looked at the matter of equity capital to see if the situation could be improved. Management had seriously considered how much extra would be needed to keep the company viable and arrived at a figure of $6 million as an absolute minimum. It was their view that to ask existing shareholders to contribute the equivalent of $1,500 each would not meet with the required success. Although farmers would like to see the company continue, there was a large number of urban shareholders. Livestock accounts number 2,290 of which only 1,000 trade actively, and if those thousand were prepared to inject capital, $6,000 each would be necessary; the Board believed nowhere near that amount would be forthcoming.

Mr Blyde expressed admiration for the efforts of Messrs Richardson, Train and Pedersen. The

matter had been discussed with them and they had agreed with the Directors’ view that the money would not be raised. It had been the Board’s opinion that had shareholders been advised earlier of the company’s position, this would soon have become widespread knowledge and added to financial pressures. At present management was under extreme pressure as to financial affairs.

Mr Blyde complimented Mr Evennett on his endeavours on behalf of the company since his appointment on 1 August 1985. As a qualified accountant with extensive management skills he had worked very hard for the benefit of the shareholders, but circumstances outside the company’s control had circumvented all his efforts to return the company to profitability. Unpopular decisions had to be made but this had always been done with the full support of the board, and directors considered that the company had been well served by Mr Evennett over the past 18 months. He also referred to criticism regarding the level of auditors’ fees charged to the company and explained that the payments included the services of a full-time financial controller and those of Mr Peter Taylor, management consultant for Arthur Young, for professional advice. He said: The Board wanted the company to continue and sought the best advice available and makes no apologies for employing the services of Arthur Hawera Star press cutting of 31 March 1987. Young. In the realisation that raising COURTESY HAWERA STAR an additional $6 million capital was an impossibility, Directors looked at a divestment programme. Problems could be foreseen with the Commerce Commission in any deal made with Wrightson’s; Farmlands of Hawke’s Bay had looked at the company but had decided against; Williams & Kettle could not see any benefit in an alliance, so that Elders Pastoral was left as the only prospective purchaser. The Board recommended acceptance of the deal arranged with Elders in the belief that it was the best option for all concerned. Mr Evennett then addressed the meeting and presented the facts on why the decision to sell to Elders had been made and amplified a number of points made by Mr Blyde, ‘though naturally’ he

could ‘not comment on events prior to his joining the company in 1985’. Slides were presented with the relevant financial information. He reminded shareholders that as at 1 August 1985 the total assets of the company amounted to $52 million: shareholder funds were at $14.5 million, liabilities $37.5 million. Shareholder equity was at 27.9 per cent, and Mr Blyde reiterated that this was too low and that an acceptable figure would be 45 per cent, with other independent stock and station firms averaging 50 per cent. ‘This was when a decision was made to reorganise the company by selling off businesses in the Wanganui area which were unprofitable’, it had also exited the motor business which was also unprofitable and reduced staff numbers in an endeavour to save costs.

The presentation was not a pretty picture, with computer projections showing that even if the company raised $6.0 million and brought the loss down to $0.3 million it may be able to survive, but not long term ‘in a breakeven or loss situation’. The proposed sale to Elders would result in a figure of $5.4 million payable to Farmers’ Co-op. Mr Evennett reiterated that the board and management had spent 18 months analysing and closely monitoring the situation. He had not come to the company to sell it up and all had worked together as a team. The directors had been very good to work with and had been receptive to new ideas and ready to face and tackle problems. He claimed that the situation has been outside the board’s control and economic conditions and interest rates had crippled the company, saying: ‘We are all of the opinion that there is no other way out, and sincerely believe that what we are proposing will be the best for the people of Taranaki.’

He appealed to everyone to support the directors’ recommendations. Mr Preston Bulfin also spoke, saying, he had not come with a glad heart to recommend the sale to Elders and it was not pleasant to come to the meeting today and suggest that those present agree to the winding up, in effect, of their company. He asked all shareholders to put emotions out of the way and treat the matter on a factual basis. The figures had been clearly set out and they should make decisions on the facts as presented. He commended Messrs Harris and Train and members of the group for their efforts to save the company, but said, ‘the actions were too late and the company too sick. The company is in a very severe crisis and is having trouble in securing supplies of goods.’

It was likely that asset realisation would produce more than the figure shown in Section 205, and the company had already received offers far in excess of realisations on the schedule, which had been written down to what was felt to be realistically obtainable. Mr Bulfin went on to outline that the Company had acquired tax losses of $12 million which could be used for the future benefit of the company. He also underscored what the events would be if the Elders deal did not proceed and the possible outcome. He said: ‘Should the Elders deal not go through, shareholders new funds fall short of the required figure and the New Plymouth property fail to sell, a Receiver or Liquidator would be appointed.’

A number of other procedural matters were discussed, including the belief that if a Receiver was appointed then ‘he would almost certainly sell off as many of the company’s assets as quickly as possible to clear the debt out’, and that shareholders’ equity would further erode the longer the company drags on. Under a Receiver or Liquidator redundancy arrangements for staff would not be as attractive and could not be guaranteed, and the $12 million tax losses would be lost. Some staff would retain employment with the Elders deal. In the matter of directors’ responsibilities, it was pointed out that, when a company is seen to be in the process of becoming insolvent, these responsibilities take on an even greater importance because should insolvency result then directors are personally responsible for the debts. Directors are of the opinion that the additional capital required cannot be raised, especially taking into account that there could be no assurance of a return on it. The Board has not taken the decision lightly in recommending the sale to Elders, and will resign in a body should the recommendation be rejected.

This was followed by the all-important motion. It was moved by the chairman Mr P. Blyde and seconded by Mr P. Bulfin: That the meeting approve the sale to Elders Pastoral Limited of the Livestock, Wool and Real Estate businesses of the company together with the stores at Waverley, Opunake and Inglewood, the Hawera farm supplies store, and farm supplies businesses at Stratford and Waitara.

Comment was invited from the floor. Paul Harris was first to his feet. He said that the resolution, if approved, would effectively remove the company from the Taranaki province and at least 300 staff members would be out of jobs, with only a limited number of employees being retained by Elders, and that: Directors have stated that there is no alternative but he and his group believe this is not so and their alternative scheme has been put before shareholders as an option to be considered. It would be possible to negotiate with a Receiver and make arrangements to safeguard unsecured creditors’ credit balances.

Mr Harris then went on to explain the substance of his group’s plan to save the company, initially referring to Sir Ron Trotter’s recent statement on current economic prospects which he said, ‘were looking brighter’. He made reference to a period in the 1920s when Farmers’ Co-op management and directors tightened up control, placed purchases on a cash basis, restructured, and asked shareholders for extra capital. It was the ‘age-old problem of too much credit extended’. He also referred to the difficulties the company was facing paying for livestock when the company itself has not been paid by the purchasers and the loss of confidence in the company and a serious deterioration in staff morale. He reiterated the need for new management and financial restructuring, stating that the plan devised by Roy Lithgow and himself would save the company $2.8 million in a full year based on a cash injection of $3 million from shareholders and the sale of the New Plymouth operations. Contrary to the incumbent directors’ opinion, they believed that all grocery sales should be on a cash basis and that this option would return the company to profitability. He affirmed that they needed the support of everyone concerned.

The New Plymouth sale was an integral part of the plan, and the Lithgow/Harris group had a number of people considering the property. Overdue debtors would be asked to pay all debts and grocery purchases would be placed on a cash basis. Shareholders would be asked to provide $3 million in extra capital, which they were confident would be achieved, representing $500 each from 6,000 shareholders. The group also felt that it was critical the company regained the confidence of creditors, and explained that the additional $3 million would be held in a bank account or solicitor’s trust account, and the issue would be of preference shares and would receive any future dividends and have preferential rights. Non-shareholders had also offered financial assistance to the group. He touched on the fact that the present directors and management had spent considerable time preparing scenarios and reports, and acknowledged that they had given his group all the information requested. He also raised the fact that Farmers’ Co-op’s consultants Arthur Young had received up to $300,000 in the last 12 months in addition to normal audit fees. In so far as the company’s personnel were concerned, he said that the group’s intention was to retain as many staff as possible and they were committed to making the company efficient and profitable. He elaborated on many other points he felt would assist the company’s recovery, finally asking the meeting to vote against the resolution, not as a form of protest against the present Board, but for the continuance of the company and the benefit of all. Should the present Board resign, the Group had a team of seven members willing to take over immediately and continue until elections can take place at the annual general meeting. Mr Blyde spoke on some of the points mentioned by Mr Harris and stated:

That directors had looked at the issue of placing grocery purchases on a cash basis but had decided that such a move would considerably reduce turnover. Mr Harris and Mr Lithgow had requested a meeting with executive and management as there were a few questions they would like answered, and after a brief meeting at which they asked a score or so of questions they left indicating they were satisfied. This could not justifiably be called an in-depth study on which to base their alternative plan.

Other shareholders from the floor rose to speak in opposition to the motion, including Morris Hey who said that he had been a shareholder since 1971. While the paper disclosed that the sale to Elders was fundamental to the realisation of assets, he felt there was nothing orderly about the manner of realisation. He also said that the company’s name change at a cost of up to $1 million had been a waste of company resources, as was the purchase of a new boardroom table at approximately $7,000, when Stratford branch alone could not pay small creditors. He considered the ‘No Alternative’ plea on the back page of the Star Weekender had been poorly placed in view of an FCOS Finance Limited advertisement on the reverse. It was his view that if the resolution was approved, the company would lose control of the saleyards at Waverley and would not be able to prevent Elders immediate entry. He was not happy with the judgement of the present board of directors, but he would be willing to put up extra capital though not while the present administration remained in power. He considered their credibility was on the line and their record abysmal and was ‘not prepared to trust their opinions or judgement’. He rejected the recommendation and opposed the motion. In response Mr Blyde advised Mr Hey that, ‘if he did not trust directors’ judgement then he must certainly oppose the resolution’.

Brian Train of Waverley said that his family had been shareholders for over 50 years and that he was one of the three who had met with directors and management during early January. He reiterated that all information had been frankly and freely given and he and Messrs Richardson and Pedersen had received total co-operation. At that stage they felt that at the least they should to try and save the livestock and farm supplies business, as it was felt that trading losses were coming from the retail sector. However, he explained it had since been established that the wool company was showing a very good profit. With Mr Pederson he had later met with Peter Taylor in Wanganui with a proposal that shareholders could perhaps surrender shares in favour of assets, but was advised that it would not be possible without the surety of $4 million in additional capital. There was scepticism that the group would be able to raise the money in Taranaki, but they considered that the loyalty of Taranaki people to the company had been underestimated. Mr Train then provided a breakdown of the $1.2 million being paid by Elders for the land and buildings at Hawera, Opunake and Waverley, the $360,000 for the woolstore and $488,000 for saleyards, which the group felt was ‘a steal’, along with other aspects relating to the sale they felt were not in their best interests. In summing up his address he said that it was not the group’s intention to stop the Section 205 Scheme of Arrangement being put before a meeting of creditors and members, which required a 75 per cent agreement of each class of creditor and members in order to be put in place and that, ‘shareholders will have to live with the decision made today. With their plan the group cannot promise any pots of gold, but can promise that shareholders will be no worse off.’

Roy Lithgow entered the debate and said that a $4.6 million loss for the 1986 financial year was shown. A $4.9 million reduction in interest charges through selling off assets and an injection of cash capital would have the company trading profitably. Amongst the assets of the company were shares in Farmers Federation, which owned one floor of a building at 57 Willis Street, Wellington, which represented $160,000 of a valuation of $1.1 million, or approximately 16 per cent, and this would go with the Elders sale. He agreed that shareholders’ equity in the company was dangerously low and needed to be doubled, and also that turnover in the first six months of the 1987 financial year was low, but had been increasing. He felt people were very despondent and believed that the only remedy was to fight to rectify the situation. Despite the many actions already taken, the company

was in bad shape. The tax losses available for the future are a very good asset to have. He concluded by saying that, ‘his group had not worked out an alternative scheme of arrangement but obviously there would be a need for a change of Scheme Managers.’

Mr Harvey of Rahotu said he believed the resolution must be rejected. He was not of the opinion that the board had considered all options and stated that shareholders had not been kept fully informed. He felt that the sale to Elders was not acceptable under any terms and that directors had not accounted for the loyalty of the people of Taranaki to the company, and that the projections for the future had been based on particularly bad trading months. He also believed that new shareholders should be approached for support. He personally did not agree with the sale to Elders and asked all present to join him in voting against the resolution. In his view the company would be one that everyone could be proud of in the future.

Mr Veitch then spoke in favour of the resolution, and in relation to the additional $3 million capital required asked, ‘of 8,500 shareholders, how many would be prepared to put money into an investment on which they would probably get no return.’

He questioned whether indeed $3 million extra would be enough and if it could be raised. The company had always been short of capital and had not generated enough profit to improve this situation. The present directors have only the welfare and future of the company at heart. Mr Evennett said directors and management had spent long hours trying to find a solution for the company. Inflation at 19.2 per cent is not mentioned in Messrs Harris and Lithgow’s option. When added to stock debtors and all other costs, the additional $3 million capital would cover only one year’s losses and the company would soon be back at the 1 August 1986 position.

There was much to be said, with a number of other speakers taking the floor to voice concerns. Most were opposed to the motion, though there were a few others who were prepared to stand and support the directors’ recommendations, such as John Pease who concluded his remarks by questioning ‘whether the proposed new directorship would bring more expertise to the job than the present board and believed it sound business to accept the present directors’ recommendations’. Frank Bourke, long-time advocate for Farmers’ Co-op staff, made an impassioned plea, questioning the auditors’ report and the lack of information provided. He concluded by stating that he felt: ‘The overall effects of the directors’ recommendations would be very bad for all concerned. He would vote against the motion and urged everyone present to do likewise.’

Other speakers voiced opposition to the motion, including Mr Ashton and Mr Allen. Mr Taylor of Arthur Young Management Services, Wellington, said … he had spoken with a number of people, and had worked with directors over the last year. The Board had had to make some difficult decisions in a period which has been one of the worst in New Zealand farming history. Directors had decided to realise on unprofitable operations and improve the management reporting system in an effort to increase market share, and had set the month of November as the deadline for a decision as to the company’s future if steps taken did not have the desired effect. The overall object of the Board had always been to keep the Farmers’ Co-op as a valid entity. The position of the company was closely monitored and responsible alternative plans were discussed, but eventually, because of increasing trading losses, the decision was made to cash up the business. Two key issues had been brought out in the alternative presented by the committee for concerned shareholders: an injection of capital by shareholders, and plans for increasing future turnover. Whilst believing that at least $6 million extra would be required, he stated that if people were prepared to support the company to the extent that this meeting apparently indicated, then it may perhaps be possible to have the viable company that was being sought. The meeting had been in progress for a considerable time and chairman Peter Blyde felt that sufficient time had been allowed for people to express their views and for questions to be asked. He advised that two Justices of the Peace were present and were prepared to act as scrutineers if

required. It was then resolved on a motion of Mr Frederickson and seconded by Mr Ashton ‘That the poll be taken’. It was earlier resolved on a motion of Mr Death, seconded by Mr Veitch, that Messrs Hugh Cunningham, J.P. and Gordon Hughson, J.P. act as scrutineers for the ballot. Voting was then carried out and voting papers collected for collation and counting. After an interval of approximately one hour the result was announced by scrutineer Hugh Cunningham: In favour of the motion 1,709 (27.10%) Against the motion 4,584 (71.87%) Informal votes (24 papers) representing 85

Total 6,378

Spontaneous applause was heard throughout the community centre. The chairman Peter Blyde rose to inform the meeting that as the motion had been lost so decisively they did not intend to put the second motion. He then thanked the scrutineers for their services and stated that the board of directors and the general manager would resign with immediate effect as a result of the meeting’s decision and that those present would now be required to appoint an interim committee until elections could be held at the next annual general meeting.

One of the toughest days in Peter Blyde’s long and distinguished farming career had thankfully come to an end. Although it could not have been the way he would have wished to depart from the organisation, he did so knowing that shareholders had exercised their democratic right to continue their resolve to save the company. It was a regrettable end to his family’s long association with the company, as he had been on the Farmers’ Co-op board since 1974, and his father Sir Harry Blyde before him. His life in farming circles started at the early age of 18, when named Young Farmer of the Year in 1953. Following a term as Dominion President of YFC from 1957 to 1958, he served as a director on both Lepperton and Moa-nui Dairy Company boards from 1976 until 1992, serving as deputy chairman of Moa-nui Dairy Company from 1981 until 1992 when the amalgamation took place with Kiwi Co-operative Dairies Ltd, where he served on the board until 1994. Other directorates included chairman of Bell Block, Taranaki, Central Districts and National Bobby Calf Pools.

Peter Blyde asked Mr Bulfin to explain the procedure for appointing an interim board. Mr Bulfin thanked shareholders for their confidence in the company and wished it well in the future. He also extended his best wishes to those who would be taking over the responsibility of administering the company. He explained that with the directors resigning with immediate effect, there would be problems if the company was left without officers to take control. The Articles of Association determined that an orderly change-over could take place, and persons could be appointed to fill the casual vacancies resulting from the retirement of the current board of directors. It was understood that shareholders had an alternative group prepared to take on the board’s responsibilities until an election at the next annual general meeting. The chairman then asked that the voting papers be destroyed and requested a motion be put to enable this action to be carried out. It was resolved that the voting forms be destroyed. Mr Blyde then called for names to be put forward to fill the casual vacancies on the board of directors. Mr Holmes of Opunake suggested the following seven persons be appointed: Mr P. L. Cook, Sheepfarmer of Stratford Mr P. R. Harris of Hawera, Accountant, Mr D. J. Harvey a Farmer of Pungarehu, Mr L. C. Laird of Hawera, an Electrician Mr R. A. Lithgow, Chartered Accountant of Stratford, Mr P. R. Pedersen, a Waverley Farmer Mr Brian Train, a Farmer Waverley.

On the motion of Mr Holmes, seconded by Mr B. Hamerton, it was resolved: That the seven persons named, namely Messrs Cook, Harris, Harvey, Laird, Lithgow, Pedersen and Train, be appointed as the interim board of directors of the company until elections are held at the annual general meeting later in the year.

The out-going directors, the chief executive, company secretary, and the seven persons named to the interim board then left the meeting to conduct formalities of the change-over. The two groups met face to face for the first and last time in the carpark adjacent to the Hawera Community Centre, where they completed formalities. Those present were: Messrs P. McC. Blyde, I. D. Adamson, P. E. Bulfin, R. L. Bremer, R. A. Death, J. A. Halton, T. J. Jamieson, J. P. V. Norman, P. A. Murdoch, J. A .T. McEldowney, D. B. Sarten, B. D. Veitch, D. C. Evennett (Chief Executive), T. J. Harrop (Company Secretary), and by invitation: Messrs B. A. Train, P. R. Harris, P. L. Cook, D. J. Harvey, L. C. Laird, R. A. Lithgow, and P. R. Pedersen.

Preston Bulfin explained that the purpose of the meeting was to affect an orderly changeover of directors within the provisions of the Articles of Association of the Company. To this end it was resolved:

Mr Bulfin/ Mr Blyde: That the two vacancies left by the resignations of Messrs Trotter and Kellick be filled by Messrs Harris and Laird respectively. It was further resolved:

Mr Harris/Mr Laird: That the resignations of Messrs Bremer, Halton, Adamson, Death and Williams be accepted and the vacancies so created be filled by Messrs Cook, Harvey, Lithgow, Pedersen and Train respectively, and further that the resignations of Messrs Murdoch, McEldowney, Bulfin, Jamieson, Norman, Veitch, Blyde and Sarten be accepted.

It was also resolved:

Mr Train/Mr Harris: That the resignation of D. C. Evennett be accepted effective from 31 March 1987.

As the Chairman had resigned, the Company Secretary called for nominations for the position of Chairman. Mr B. A. Train was nominated. Mr Pedersen/Mr Lithgow: and there being no other nomination, Mr Train was duly declared Chairman. The carpark meeting was convened at 5:30pm and closed at 5:37pm. The shareholders had won the day. The new board and chairman returned to the meeting, where Mr Blyde congratulated Mr Train on his election as chairman and wished the new board of directors all the best and said, ‘He would watch with interest the company’s development.’

Before relinquishing the chair he addressed the meeting, saying that the former directors had done their best for the company, and hoped that shareholders would now give the newly elected board every support in the future. It was indeed the end of a day in the life of Peter Blyde and for all involved, regardless of which side they were on, one they would never forget. Although it was a decisive win and clear demonstration of people power and democracy at work, the new team at the top had yet to realise the magnitude of the task ahead and the full extent of the company’s extraordinary circumstances. However, no one was under any illusions and, as time would prove, the new chairman would be one of the most tenacious and tactically innovative personalities in the modern era to head ‘the Co-op that would not die’.

Brian A. Train, chairman 1987–2005 and executive Scheme manager of The Farmers’ Co-operative Organisation Society of New Zealand Limited.

Brian A. Train then took the chair and on behalf of the newly appointed board thanked the meeting for the support received and said they were all pleased to have been given such a clear mandate. ‘I cannot promise a pot of gold at the end of the rainbow. We can only promise to do the utmost to get the company trading profitably again and that will not be easy.’

Personally recognising the time and effort put in by the previous board on behalf of the company, he called for support from shareholders and clients and asked the meeting to acknowledge that contribution by acclamation. It was then moved by Mr Train, and seconded by Mr Cusdin, that all further business be dispensed with and the meeting be closed. A motion by Mr Frank Bourke, seconded by Mr McDowell of New Plymouth that expenses incurred by the shareholders’ committee be reimbursed to them was stymied by Mr Train, who asked that it be tabled for discussion at a future meeting as ‘it was not possible to produce accurate figures for the expenses involved’. A further motion ‘that other business of this meeting be dispensed with’, was resolved. Brian Train then closed the meeting.

Trevor J. Harrop, B.Com, CA, financial controller/ company secretary of The Farmers’ Cooperative Organisation Society of New Zealand Limited, 1982–2008.

Headed by Brian Train, the interim board was now charged with delivering a profitable company back to shareholders. Although he had told them in no uncertain terms that the board could not promise any miracles, it certainly looked as though they would need one, or at the very least some divine intervention. There was no time to lose and the interim directors and the company secretary Trevor Harrop immediately returned to the Farmers’ Co-op boardroom at Regent Street, Hawera. The day had taken its toll and business was restricted to ‘urgent priorities’. Matters requiring immediate attention were: Reaffirm the support of the banks. Re-motivate staff and company personnel. Retain customer confidence in the company re wool and livestock sales and payments. It was decided to withhold any statements relating to the payment of wool and livestock proceeds until after meeting the banks the next day. Although the ANZ Bank could not be contacted, Westpac agreed to discuss the situation at 11:00am. Trevor Harrop was invited to accept the position of acting general manager. Trevor responded, that such an appointment was not in the best interests of the Company at that time. The Company needing a front person well known to the clients, and his appointment would also create another vacancy in a difficult to fill role (Company Secretary and Financial Controller). Critical to any modicum of success being achieved at this time was that the new board had the indulgence and confidence of a sympathetic, energetic and experienced professional company secretary who would work with them in the revitalized quest to turn the company around. Trevor suggested that a suitable alternative for the position of acting general manager would be Colin Morrison who had wide experience in stock, station and retail merchandising divisions. Trevor Harrop was then asked by Brian Train: Are you available to carry on as company secretary’. Trevor Harrop said, ‘Mr chairman, I do have my resignation’, and pulled it out of his pocket. He said, ‘I will hold it in the meantime if that’s alright with you’! Based on officer’s duties and responsibilities under the Companies Act the circumstances that prevailed required the company secretary to present a written resignation. Trevor Harrop also stated that, ‘he would, however, be prepared to assist in any way possible given that it is the shareholders’ wish that the company continue in some form.’

It was also agreed to hold a meeting with the management committee the following day Tuesday 31 March at 9:30am and Trevor Harrop was to contact Messrs Morrison, Western, Pope and

Grenside to attend. Discussion took place in connection with establishing a trust account for wool and livestock payments and it was decided to place the matter with Mr Ken Horner to consider the legal requirements. The meeting closed at 7:00pm

Day one ended and, as Brian Train said, ‘we were punch drunk’. But this was only the beginning of an enormous undertaking. Who was the new chairman Brian Train? He was certainly not a well known Taranaki man, and would even dispute the assertion that he lived in the province of Taranaki with the old Wellington/Taranaki boundary some five miles north of his home town of Waverley. There were people who ‘didn’t think they could trust a man from Waverley’. He is a pragmatic man of few words, tenacious, confident, single minded yet generous, with old-time values and a devilish sense of humour. In the 1880s his great-grandfather had emigrated from Scotland to New Zealand and in the Manawatu he opened retail stores at Feilding and Marton. He purchased a block of 1,500 acres of virgin bush at the top of the Waitotara River. Brian’s father and uncle worked the property until about 1915/1917 when they walked off and came back to Waitotara, with his uncle purchasing land in Hawke’s Bay and his father a sheep farm on Brewer’s Lane. In 1937, C. G. (Clem) Trotter general manager of Farmers’ Co-op provided the family with the opportunity to purchase a farm at Waverley immediately opposite the racecourse and they have been farming this and other property ever since.

Brian Train was 16 years old when his father, Fred, passed away, and a few months later he went to work on a station near the Thames estuary for two and a half years, eventually returning to Waitotara to manage the homestead farm and a 50-acre block of leased land his father had transferred to him just before his death. The Trains had been Farmers’ Co-op shareholders for over 70 years, Brian’s maternal grandfather, Thomas Alexander, and his brother Gavin having the distinction of being founding shareholders in 1914. Although a client for many years, his first close encounter with Farmers’ Co-op was in the spring of 1986, following the sale of 300 dairy heifers at the Hawera sale. Payment for stock was always due within 14 days of the sale, usually on a Thursday, but cheques were not being received until the following Monday. On realising that his Farmers’ Coop farming account with the company began to accrue interest, Brian rang the credit manager, Tom Kilminster, of Farmers’ Co-op and challenged him: Tom you are charging me interest! I was really offended. He said, ‘Brian, it is now company policy’. I said, ‘Tom, thank you very much, if that’s company rules that’s fine’. I put down the phone and rang Colin Morrison – this was about the October. I said, ‘Colin, you are area manager and you are sending your cheques out late and you are charging me interest on my account’. … He said, ‘Brian, you will have to talk to the accountant about that’. I said to him, ‘if you are charging me interest – you pay interest to me’. With that he put me onto Bob Green. I said to Bob Green that from now on I want interest backdated to the date of each sale for the last three months that you have been paying me on the Monday instead of the Thursday. Colin asked me what rate of interest I wanted. I told him that they were paying 14 per cent or something like that, but ‘all I want is what my bank charges me’. This particular incident prompted Brian to inquire what was happening within the company. He had heard rumours that a sale to Elders Pastoral Ltd was being considered and had not found this particularly pleasant news. His inside contacts had provided sufficient information to motivate him and few others in the district of Waverley to consider taking up the challenge to fight what would, if it came about, effectively end the existence of Taranaki’s oldest and most revered rural trading operation and, as Brian would say, ‘the rest is history’! In fact, little did he realise that this was just the beginning. The remaining new board members, namely Messrs Cook, Harris, Harvey, Laird, Lithgow and Pedersen, went away from the first board meeting little the wiser as to the magnitude of the situation. Collectively they represented a cross-section of the community, with varying levels of experience and knowledge of the company’s affairs. Peter Cook’s family had been shareholders for at least two generations, operating a dry-stock farm at Huinga, Toko east of Stratford. Paul Harris,

a highly motivated Chartered Accountant at Hawera, had worked for Farmers’ Co-op in earlier years. Don Harvey was a farmer from Pungarehu, chairman of the Dairy Section of Taranaki branch and a national vice-president of Federated Farmers. Joe Laird was an electrician from Manutahi, and Roy Lithgow a Chartered Accountant at Stratford and former employee of Farmers’ Co-op. Paul Pedersen was a farmer from Waverley, former chairman of the Federated Farmers Wanganui branch and Dominion councillor.