Update on injunction to stop Westland Milk takeover
31st July 2019
Chris Leitch, Leader
Social Credit has been seeking financial and legal support to lodge an urgent injunction to stop the takeover of Westland Milk Products by Chinese conglomerate Inner Mongolian Yili which is 25% owned by the Chinese government.
That application for an injunction needed to be lodged before August 1st – the date the Scheme of Arrangement for the sale kicked in.
Party Leader Chris Leitch says there were a number of grounds the party and its legal team were considering but they have decided not to contest the Scheme of Arrangement or the High Court decision to approve it.
Consequently an injunction will not be lodged today.
The legal team are now focussing on the Overseas Investment Office decision.
Given that the Board presented shareholders with only one option, and have been unwilling to give shareholders any information about the process undertaken, the potential to proceed against the directors in their individual capacities is also under the microscope.
The board did not pursue investigation of two significant options, one being a merger with Fonterra, and the other being an approach to the government for assistance by way of a Reserve Bank loan and/or assistance from the Provincial Growth Fund.
Regional Economic Development Minister and Associate Finance Minister, Shane Jones, claimed, in a report in the Herald on July 18th that “as steward of the Provincial Growth Fund, I was never approached [by Westland directors] as to whether or not we could look at restructuring and help shore up that company.”
But Radio New Zealand reported on July 8th that it “understands ministers might be breathing a sigh of relief that farmer-shareholders gave Yili the thumbs up.
That is because rejection of the Yili deal might have left the taxpayer being forced to pick up the tab.
It went on to say it “knows that this possibility was considered at the highest levels of Wellington bureaucracy.”
And that “It was further told that there had been discussions about a potential bailout by government ministers.”
Clearly something doesn’t add up.
Board members who were shareholders in the company also stood to make significant personal gain from the outright sale.
The interest in the potential action has been enormous with a pleasing inflow of donations to support it.
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