Shareholders’ Association weighs in on PGG Wrightson boardroom battle

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The Shareholders’ Association has written to major private and corporate PGW shareholders to spell out its concerns about a boardroom battle at PGG Wrightson.
Photo: Supplied

The Shareholders’ Association (NZSA) has thrown itself into the thick of a boardroom battle at the rural services company PGG Wrightson (PGW).

It has labelled the attempt by PGW’s major shareholder, Singapore based Agria, to dump most of the current board and replace them with their own nominees as one of the worst attempts by a shareholder to interfere in the operation of a board.

The NZSA has written to major private and corporate PGW shareholders to spell out its concerns and seek support to oppose Agria’s moves.

Chief executive Oliver Mander said Agria’s moves for a special meeting to replace the board were against the interests of smaller shareholders.

“What we’re concerned about is the potential loss of independence on the PGG Wrightson board, and the greater risk of that board acting in the interests of Agria rather than the long term interests of PGG Wrightson.

“NZSA wishes to ensure that no minority shareholder in New Zealand should have to be subject to this type of conduct by any major shareholder in a New Zealand company.”

Mander said the association was pleased local independent directors had fought back, taken control of the board, resisted any rush for a meeting, and decided to vet and report on all would-be directors.

He said there was particular concern that former chair Alan Lai was nominated for a board position barely a month after the expiry of a five-year ban imposed by US authorities for market manipulation, and that Lai was insisting he should be made the company’s chair.

“We speculate that this insistence is likely to reflect Alan Lai’s state of mind in relation to PGG Wrightson, in that he regards PGW as his own private company.”

Mander said if a meeting was held the NZSA would vote any proxies it had against the Agria motions, and propose its own to beef up protections for small shareholders.

Meanwhile, the NZSA has also weighed into the battle to revive Fletcher Building’s fortunes and is lobbying the company to provide full information on any investigations into the value of the company as a whole and its break-up value with potential divestment benefits for shareholders.