This article was published in The Australian in January 2016...

This article below was published in The Australian in January 2016 by Contributing Editor Peter Van Onselen. Its probably now as pertinent as anything regarding The Nationals. Right now, the Backpacker Tax is hitting the highlights but the suggestion is "wait for it, wait for it..." - Why? Fruit & Vegetable growers and a raft of other back packer employers are left hanging in limbo whilst the powers that be control the flow of political capital to enlarge vote prospects. Carnarvon WA born Andrew Broad sits in federal parliament as the member for Mallee in Victoria where he now lives. He's not happy with the backpacker tax and he's speaking out. The rest of The Nationals a little too quiet. Highlights that the Nats are in the Liberal back pocket and if they really are to survive as a political force they will have to return to their original Country Party values and break away from the Liberal coalition once and for all. As Labor has slowly spent 40+ years drifting right, the middle ground between Labor & Liberal has diminished and the Nationals have lost ground, direction, support and seats.
Time to engage in proper Unique Competitive Advantage as a retail firm might.

Time to wise up and get fully and properly independent. One thing Peter Van Onselen has done is possibly give WA Nationals more credit than their due, they haven't been properly independent either. They haven't left cabinet either and apart from the City of Perth Bill they haven't crossed the floor since 2008. Opposing the Fremantle Port Sale was the first sign of them growing a pair and standing up, but they have presented no plan, no conversation & no prospect of knowing what exactly what they want.

Re Royalties for Regions, great initiative. But that came in back in 2008. Filter that out and we don't get a lot of non RfR talk. Its now government business, not Nationals bragging rights or Nationals gift money. Lets keep that in perspective. Its under threat because its been so blatantly co-branded with Nationals logos at every opportunity it now will threaten its own survival. Its worth crossing the floor to keep it, but is that the only issue worth crossing the floor? Until the Nationals state (WA) and federal man up, its going to fall victim to a loss of support and we'll see more break away parties start up. Look over east, one's planning on fielding 50 candidates.

Here in WA, the Parliamentary National Party (the Nationals State MPs) are focused on re-election. They look to have developed their own culture and appear to decide within the party room what their stance is on any issues. Same group cannot field an Agriculture Minister in coalition...THAT is a red flag of failure.
They have made no comment on Back Packer Tax...another big red flag failure and no proper policy outlines...more red flags.

Read PeterVan Onselen's article now 4 months old...but relevant as ever.

Peter Van Onselen

Contributing Editor

Sydney

 

If the Nationals are serious about representing regional and rural Australians they need to think about breaking the formal Coalition at the federal level.

At the very least they need to be more bullish and break the agreement when in opposition, coming together only in government. Even then, it is hard to see why the party feels the need to formalise a coalition. In Western Australia the Nationals refuse to tie themselves to the hip of the Liberal Party, and as such they do not secure the position of deputy premier as they do in many other states, or as the federal arm of the party is rewarded with the deputy prime ministership.

While this is a nice title and pay rise for one Nationals MP, and something others no doubt aspire to, it is a hell of a price to pay for the many concessions Nationals are forced to make courtesy of the formal Coalition agreement.
The most successful two card trick John Howard played on Nationals leaders during his prime ministership was tricking them into believing the Nationals were a force in the government. During the Howard years the number of Nationals in the parliament steadily declined. So did the say of the junior Coalition partner.

The powerful figures of the past were not well represented by the likes of Tim Fischer, John Anderson or Mark Vaile. All three were good and decent men who wanted the best for their party.

But they were played off a break by a more savvy politician in Howard.

All the big economic debates saw the Nationals dragged to the economic right, with questionable consequences for the regions and constituents once fiercely loyal to the party. During this time we saw the rise and rise of rural independents, off the back of frustration with Nationals’ subservience to the Liberals in government.

While Nationals will never be able to carry the day on all policy scripts when in partnership with the Liberals, they should be able to do better than they did under Howard, or indeed have done since that time.

The West australian example of Royalties for Regions, a policy developed by the Nationals at state level after they broke their coalition with the Liberals after the 2005 election, delivered the party the balance of power in 2008 and a new grouping of seats in 2012. It also gave regional and rural voters a genuine alternative to the two major parties without requiring an independent vote.
Fast forward to today at the federal level, and we saw the Nationals leader and deputy leader recently forced to eat humble pie when their manoeuvring to move Ian Macfarlane into their partyroom was thwarted. I can understand Liberals being angry about the backroom planning. And Macfarlane was little more than an over-the-hill disaffected and dumped minister trying to breathe new life into his career.

But what the Nationals sought to do had been done to them previously by the Liberals, without being blocked.

So what do Nationals do now they have been thwarted? The odds are they will retreat and simply try to paper over differences with Malcolm Turnbull and others to achieve the best result at the election that they can. But Nationals should stop and think about the likelihood that the Prime Minister’s surge in support is city-based, rather than a regional phenomenon.
If Labor gets its act together in the regions, a Turnbull government could deliver the same blow to the bush for the conservatives that Jeff Kennett felt in 1999 in Victoria when the regions turfed him out of power.

For all the grief Barnaby Joyce cops, he is the closest thing the Nationals have to a powerful regional voice in parliament. The sooner he takes over from Warren Truss, the better for the brand of the party. But a Joyce takeover isn’t of itself the solution for the Nationals.
They need to rewrite the Coalition agreement and do so with powerful conviction. Changes made in the wake of Turnbull’s takeover weren’t enough.
Nationals need to rewrite the deal in the lead-up to the next election, in recognition of the fact in all likelihood the Liberals will need the Nationals to retain government.

Nobody should underestimate the challenges Nationals face. Demographic changes invariably see the loss of regional and rural seats each time boundaries are redrawn. In Queensland the Nationals have merged with the Liberals, reducing the party’s independence in its most powerful state. The changes we are witnessing outside the main cities are requiring Nationals to recalibrate and no longer only be a “party of the bush”.

Smaller urban centres are their future, and this creates generational differences when managing vastly different constituencies. Throw in the social disadvantage that is becoming more prevalent in some regions, and the alliance with the Liberals becomes even more of a burden.
Then we have the challenges individual electorates face.

If Nationals aren’t under siege from rural independents, they are being challenged by the Liberal Party when local MPs retire. Again, during the Howard years we saw a virtual breeding out of existence of National electorates by their senior Coalition partner, which would come in with more money and more campaigning know-how to pluck seats from the Nationals when they were at their weakest — at the moment popular long-term MPs retired.

Finally, Nationals need to be mindful of threats from the Greens on their left flank — not necessarily as a direct electoral threat, although that was an issue in two seats at the NSW election, but also in terms of preference negotiations.
A National Party decoupled from the Liberals might be able to secure better preference deals with Greens ahead of the Labor Party. Remember, there are some loud environmental voices in the regions.

While Nationals MPs are home with their families, they should take a look around and ponder how different their environment and the world outlook of their friends and family are compared with the modern city-centric Liberal Party.
They should think about how likelier they are to win applause in their hometown electorates if they stand up to their Coalition partner on issues from tax reform to how to divvy up welfare initiatives. And they should think about how much easier it would be to win arguments with Liberals if the Liberals realised the junior partner in the negotiation wasn’t bluffing.

Walking away from any Coalition agreement must be a live option for Nationals. It hasn’t been for too long and the party has become a shadow of its former self.
Look west to see how to build a powerful independent party organisation. Then copy what it does.

Peter van Onselen is a professor at the University of Western Australia

AGC vs CBH - What the? Part II

Below is the update flyer from Australian Grains Champions. In bold red, answer from this blog.

Dear grower,

The benefits for YOUR farm business Australian Grains Champion (AGC) was formed by a group of grain growers who want to ensure the longevity and growth of CBH and the WA farming businesses that built it and rely on it. The Australian Grains Champion proposal will deliver a range of benefits to you, your farm business and the entire WA grains industry: How, lay the model out properly so everyone can assess it and try to stay away from quick short & vague bite size thought bubbles that suffer from the Devil in the lack of detail. Waiting...

A strong CBH for the future A listed business with a commercial structure that can make commercial decisions will be the foundation of a successful WA grains industry for the next 80 years. You mean a publicly listed company that will eventually have a shareholder base like Wesfarmers where the growers become the customers and the minority shareholders. Remember AGC directors suggest with shares you have the ability to sell and realise extra cash. Secondly if you need to raise capital, the board can and would be wise to look at additional share issues to raise capital further eroding whatever share of the company growers might have. A well run Co-Operative is not better or worse than a well run Listed Company but the co-operative has the advantage of being grower owned, the grower is the customer and the owner. No dividends but then that's a bleed off of the books where in a Co-Operative benefits are quarantined to the members, not off to non farming or even foreign share owners. A Co-Operative that's excelled for 80 years can survive another 80 years and at present the East Coast looks and envies what we have.

Large, upfront cash payment Cornerstone investors have committed $600 million which will be paid directly to grower members. Which eventually that will have to be repaid, with an added profit margin...where do you think that will eventually all come from. The "Cornerstone Investors" will have to have their loan repaid or more likely, they will become the new majority shareholders who'll control the company, work out the dividend policy (which previously went back into the entity to benefit only members/customers) and they'll also work out which less performing assets need to be sold off. In addition to the cash payment, CBH members will also receive ongoing shares in the business. And that's because the cornerstone investors don't have anywhere near the amount of money to just buy CBH out. They don't offer a share option in lieu of cash, but a structured set cash/share amount and you can expect that their net worth estimation will be a fraction of its true worth otherwise they'd be paying you many more times the amount of shares to make it viable for the Cornerstone Investors. Please remember there's nothing wrong with Investors, but they are not SELFLESS ALTRUISITIC BENEFACTORS OF THE WA GRAINS INDUSTRY.

Valuable, tradeable shares and ongoing dividends Australian Grains Champion will list on the ASX. Yes where anyone can buy in and dilute grower control...just like Wesfarmers. Growers will receive shares that they can retain, sell or gift to their children. Sell off to help dilute the growers shareholder control...like Wesfarmers The value of CBH will be returned to growers’ own balance sheets. And the Cornerstone Investors to the tune of...well no one is willing to say, but currently the value of CBH is the entity retains all returns to be quarantined for the benefit  of the grower/member/owner/customers. Once listed, its customer vs business with financial bleed offs. If a Wesfarmers co-operative member had $10,000 in shares at the time of corporatisation and reinvested their dividends, today the value of their holding would be worth almost $850,000. And growers no longer own nor even go close to remotely controlling the Industrial conglomerate that's primarily Hardware, Coal and Insurance. You do know they renamed their Agricultural arm "Landmark" and sold it. Your point here is strip it out and sell it off to make another Sharemarket opportunity, not keep and guarantee its future as grain handler. Yes I think I see the real motivation of the Cornerstone Investors. Is one the financially troubled GrainCorp?

Pay down debt and/or invest in your business Balance sheet strength: will allow you to retire debt or invest. As you lose control of a Co-Operative that has you as both owner and customer. Perhaps all growers would similarly like to sell off all their machinery and use the cash to invest or retire debt with all the seeding, spraying and harvest now done by a new ASX listed contracting company? Maybe sell the land, use the money to invest or retire debt or as one of the AGC Directors said on the radio "go on that long overdue holiday you've always wanted" - Interesting that a Perth based director clearly thinks growers are either stupid or as shallow as a spilt drink on the lino. Right now the benefits come on the 3rd Bottom Line kind of like a social dividend but restricted solely to Grower Members. CBH has Balance Sheet strength and its rewards are kept for the grower members without showing up on their books. On-farm investment: capital for additional investment in machinery or infrastructure. Yes but if you have a good business why do you HAVE to have the AGC model to do that? Ahhh more bigger machinery for the husband and overseas holiday for the wife. Yep get it, its a shallow honey trap. Expansion: opportunity to grow your business. Again, why lose control of a set of books that have been self growing for 80 years and can do for decades to come (and lose quarantined grower benefits in the process) to "grow the business". Sounds like a weird form of cost shifting. Off-farm investment: to diversify your farm business. Again, why lose control of one asset to start another one of lesser worth and return, albeit on the 3rd Bottom Line? Family succession and retirement. There are those where this will appeal. But no one ever go into a Co-Operative knowing they were one day going to make a financial windfall to retire on. Nominal share holding, huge social dividend like return. But if you can appealing to people's greed it might work and eventually feed the Cornerstone Investors. Who are they again?

Powerful grower shareholding Majority share ownership by WA grain growers on listing. BAM! Yes "on listing" and if you need to raise capital, issue new shares to the stock exchange and see grower control get diluted. Sorry its a false and misleading statement to suggest grower control will be retained. even encouraged denies it could disappear completely like Wesfarmers. More influential Grower Council. Influence on who exactly? The Board? Ahhh the directors have strict legal obligations under the Corporations Act to act in the best interests of the shareholders, all shareholders NOT PRIMARILY GROWER SHAREHOLDERS. Influence is fine, but be care to not inadvertently deceive current members into thinking they have some control over the board. Clearly not the case. Grower Directors. You shouldn't care if a director is a grower, an ex grower or an ex plumber. Their background is irrelevant because under the law they have to operate in the best interests of the shareholders just as the current directors (Grower and Independent) do now. Now the fact is the business is storage and handling plus other enterprises that deliver benefits to the grower/owner/customers. Grower Loyalty Incentive Scheme. Well you say that now, but it may not be deliverable because...well just look at those 4 words. No detail. Right now you have a Grower Loyalty Incentive Scheme. You can get the benefit of the entity or you can stop using CBH and look to a rival where you are solely the customer dealing with a company that best is trying to sell services for a cost/plus benefit with only a portion being reinvested. You could quarantine ALL FINANCIAL RETURNS to the growers...oh wait CBH does that now.

It depends what questions you ask CBH is characterising overwhelming grower support for a structure and governance review as some sort of endorsement of its current strategy. Without Australian Grains Champion nothing would be happening at all. How could you know that. Strategic Direction is the private domain of the Board. Do you have a leaking presence on the board? You seem adamant that this only came about due to AGC presence...how is such a claim backable without full knowledge of what's been going on within the Board? Interestingly there was one glaring omission in the CBH polling: Would you support the full Australian Grains Champion Proposal being presented to growers? Why would anyone need to be asked such a question when the members weren't given the full proposal with ALL the detail the CBH Board was given? The board's job is to deal with take overs, not the shareholders. That's what shareholders elect a board to do, among other things. Even though we don’t have the same resources as the CBH public relations machine, we've done a private poll (not a push poll to publish) and almost two thirds of growers said they want to see the AGC proposal put in front of growers – these growers agree this is not a Board’s decision. And in the media AGC claimed it had overwhelming support, yet later said they'd surveyed 500 people. CBH has 4000+ members and we do not know if all 500 you surveyed where all CBH members or not. CBH survey double the growers AGC did and their survey showed majority support for rejecting the offer. CBH is the norm, AGC is the challenge to the status quo, it would be easy to assume the majority attending an AGC event would be pro AGC. At any rate with AGC's figures, their poll has shown 280 people supported the idea of the proposal being put to them. This is still a false understanding of the rights, roles and responsibilities of directors and the proper function of a board. Thankfully only 280 people were fooled and hopefully not all 280 are actually members of the Co-Operative...which has 4000+ members. AGC's supporters represent (if the numbers are correct) exactly 7% of the CBH membership. It is not a Board decision. It is YOUR decision. Well no its not. For it to be a shareholder decision the membership would have to hold an extraordinary AGM, get 75% of the membership to change the structure and oh did I mention this, sack the entire current board...THEN and ONLY THEN does it become a decision of the members and even then it would have to happen BEFORE the new board is installed. Its utter madness and shows the people wanting to take CBH to the "Wesfarmers Land of No Grower Control nor Return" don't understand what a Board's role is and you don't either. We will continue to work to ensure you get the chance to vote on the proposal. How can you help?  Register your interest on our website so we can communicate directly with you on how we will progress getting this proposal in front of growers. Talk to other growers about this, and encourage them to also make sure their voices are heard.  Make sure Australian Grains Champion has their contacts. If you can assist Australian Grains Champion in getting the proposal before growers, and you can play a more active role, call one of the Directors - our personal phone numbers are listed below. We can help make sure your view is heard.  We will continue to work on behalf of growers, for the future of grower’s families whilst you are seeding.   We look forward to communicating with you in more detail as soon as everyone has got off their tractors and the seeding rigs are pulled up, washed down and repairs done Sorry ,left decidedly unconvinced of AGC and its desires. It looks to be exactly what they said, "a Wesfarmers moment" where grower control is lost for a very small up front payment and a gift of shares they kinda already own. The AGC group doesn't understand the role of the board and hopes to rouse the members in some odd angry call to arms to recover their (not actually)lost rights and decide instead of the Board. A group wanting ASX listing with such poor governance knowledge is astounding and nearly enough to urge a flat no to the proposal without proper detail.   AGC was/is critical that the CBH Board didn't open up all its books to AGC to better assess things. If that is so I'm seriously concerned is a group of directors cannot grab the Financials from the Annual Report and recast them using proper Ratios and a few other financials tools they're unaware of to see where the companies strengths and weaknesses lie then make a real serious offer the board has to say yes to because its too good. I guess with financially stressed Cornerstone Investors like GrainCorp there's not much money to throw about. Yeah if the deal (AGC won't release) went ahead I'd divest on the first day of trading. Being ill equipped does not get overshadowed by motivation and determination. And there's the Youtube Sensations. Again thought bubbles and motherhood statements, appealing platitudes but no real proper well set out detail Now after all that, there's something else that has to added...and we'll use raised capital letters to stress this one point above all the others...   1) IS THIS A SIDNEY KIDMAN OF AUSTRALIAN GRAIN MOMENT BECAUSE IF AGC ARE TRULY THE SELFLESS ALTRUISTIC BENEFACTORS OF CBH MEMBERS AND THE WA GRAIN INDUSTRY, WHY SPEND WASTED DOLLARS AND DO IT WITHOUT OTHER OUTSIDE INVESTORS, WHY WOULD CBH NEED A TAKE OVER TO CHANGE STRUCTURE WHEN IT CAN JUST DO IT ALL ITSELF, AFTER ITS NOT A DEBT LADEN CO-OPERATIVE? I suspect some of the un-named Cornerstone Investors have greater personal ambitions than just listing the company. 2) IF THE BOARD IS GOLD PLATING, AS AGC PUT IT, AND IS "POLITICAL" THEN WE HAVE A BOARD THAT IS FAILING ITS LEGAL OBLIGATIONS UNDER THE CORPORATIONS ACT. WHY IS AGC NOT OUTLINING THESE TRANSGRESSIONS TO ASIC AND PUSHING FOR PROSECUTUIONS??? EITHER THE BOARD IS POLITICAL/GOLD PLATING AND THEREFORE BREACHING THE CORPORATIONS ACT OR IT ISN'T. Which is it? If it is, the AGC Board should be being the great corporate messiahs they're pretending to be and contacting ASIC.                                        SERIOUSLY THINK FOR A MINUTE.

AGC vs CBH - What the?

So now Australian Grain Champions are declaring they're not going away.

They're declaring their surveys show an overwhelming support for their actions and possible future bids.

CBH surveys 1000 growers and that shows an overwhelming support for the Co-Operative model.

AGC's contentions now are as follows...(from their website back in March 2016)

1) "The decision by the CBH Board to reject our Proposal, without giving you the chance to consider it, was extraordinary."

 

Well no it wasn't really, the board did what they board was elected to do. I find it extraordinary a hostile take over would suggest the board doesn't make decisions, the share holders do. Why does the board have board meetings and yearly there is the member's meeting called the AGM?

Boards and specifically the directors have what's referred to in the Corporations Act as a "fiduciary duty" to operate in the best interests of the shareholders at all times. Its a grave transgression to do otherwise and directors are personally responsible both legally and financially if they fail to do so. You can expect them to do so, if not throw them out at an AGM or contact ASIC. I notice AGC did neither, because they lacked the numbers for an extraordinary AGM and had no proof of any breaches of the Corporations Act, although its almost looks like a veiled inference that way at times.

 

2) "Effectively, the 12 directors have acted as censors-in-chief, keeping you and the 4000 other owners of CBH in the dark, blocking your right to review the Proposal in detail and an honest discussion of it. This should be your decision to make – not the Board’s."

Well no, that's actually quite incorrect and very mischievous in my opinion.

If somehow AGC thinks the board has breached the Corporations Act, they should cite chapter & verse where, when and how and lodge a complaint with the federal regulator of directors, ASIC.

Make up your mind and either lodge a complaint or take down the accusation/inference.

 

 

3) Instead, the CBH Board says it is commencing a long-winded “consultation process” on CBH’s future that will take six months to produce an “interim” report. This process will inevitably deliver more of the same and cost you a lot of money.
This is not good enough. The Board has had years to work on these issues.

 

With legal and financial advisors CBH would have had to employ, there's a big cost. There's a lot to the cost & effort in assessing the Take Over Bid, not to mention extra board & management hours logged and the large amount of lost productivity from middle and senior staff. The Board has not had years to deal with "these issues" because their current new issue at the time was assessing a take over.
 

There was 2 aspects seemingly overlooked, hidden or not understood by AGC.

Due Diligence and Due Process.

If the board has not performed properly, again, it has failed in its fiduciary duty and the board should be reported to ASIC with a full list of breaches and legal action should commence.

Why has AGC not done this? And if the offer was accepted, would any accusations/inferences over the board's performance and/or failures been even mentioned? Nope sour grapes is the new sponsored drink during unhappy hour.

Make up your mind and either lodge a complaint or take down the accusation/inference

 

4)Australian Grains Champion has a well-developed Proposal that is ready for implementation now.

 

I'm sure it was deemed ready for implementation but it was presented and AGC fired shots at the board before it had even given its final decision. Why is that?

Is that how you're supposed to act when making a proposal? Highly unprofessional.

Ready for implementation, but it seems it was a poorly thought out plan and well below the best interests of the members. Think otherwise?

Make up your mind and either lodge a complaint with ASIC or take down the accusation/inference.

5) It is the only Proposal that is real, backed by Australian money, provides for significant grower control and is unlikely to be duplicated.

 

Of course its real, it wasn't a hologram but a hologram probably has more depth. One key entity involved was GrainCorp which is a financially stressed listed company. Remember that, its a "corporatised grain handler". How bad a shape is it in?

Pretty bad. Its P/E Ratio is 60 which is close to basket case. Its dividend policy is to return to its shareholders between 20 & 60% of after tax profits, yet it can still only manage a Dividend Yield of 1.17%. Now if that isn't a sad picture of a pubic listed company that serves as a cautionary tale, please remember GrainCorp recently survived a proper take over from USA giant ADM, only failed because the federal treasurer stepped in. But remember ADM is a not a majority shareholder, but it is a major shareholder with a Nominee Director on the GrainCorp board so their push for a take over of a very good grain handler like CBH would be gigantic net dollar gain for GrainCorp and ADM.

You bet GrainCorp want a slice. Its probably its best chance at a life line before their already disgruntled shareholders go to their AGM and push for proper financial reform and deliver proper returns via dividends or wind the company up. If I was on GrainCorp board I'd push for a CBH takeover but then I'd be putting dividends on hold until the company is turned around and if that wasn't accepted I'd resign.

Proposal was real, poorly put together, poorly explained and...well all round poor or CBH board would have snapped it up.

So, did CBH board failed fiduciary duty when they knocked back the deal? Well...

Make up your mind and either lodge a complaint with ASIC or take down the accusation/inference.

6) We have spent the past few weeks on the road talking to hundreds of growers like you. There is strong and growing support to see and discuss our Proposal to unlock the value in CBH and to set it up to meet future challenges.

As it turns out by their own admission AGC surveyed 500 growers and although they haven't issued the numbers in favour, they said it was overwhelming. Maybe perhaps time to be consistent with strategy AGC wishes to impose on CBH...release all the actual numbers in the survey and let all growers decide not the AGC board. I'm kidding, but in light of the poor performance of AGC on a number of levels already I wouldn't be buying if they were selling shares in God.

FWIW if growers want to see your proposal, show it in all its detail.

One question unlock the value...unlock it to whom? Yep, we'll get to that.

No, we'll get to that now with some of the other abyss size flaws.

1. AGC you have 5 directors. Who is the Chairman?
    
2. Do all 5 own equal shares or is it 3 owners with 2 independent directors to offer financial skills and legal skills? Are there more shareholders in AGC you haven't told us about? How many shareholders are there? Can anyone buy into AGC? Its just there maybe a take over bid and if you can open all your books fully we can assess what we think we can offer before we take you're outfit to a new unprecedented level. C'mon...no need for shyness now ;-)
    
3. Is AGC really a Jones/Middleton/Michael private company that has embarked on an ambitious take over bid of a WA Co-Operative that is probably the biggest Co-Op in the country by capitalisation and by profit? In reality are three families looking to knock the ownership out into a public listing or do we have Shadow Directors and undeclared shareholders? You don't have to answer.
    
4. When you're done there, please explain fully your proposal to the extent that if the deal was accepted how much were each AGC directors set to personally make out of the deal (Sorry I meant out of CBH coffers, growers money, get it?)...in dollars and how much each share holder would have made? Not in receipts from converted shares but in fees and charges paid to AGC.
    
5. This of interest "provides for significant grower control" - Just how? If you publicly list the company its open to non grower ownership. If you need to expand and invest in different  enterprises, you will have to raise capital...release new shares. More dilution of the grower ownership. THE ONLY WAY to maintain grower control is to make sure its only ever owned by growers. Co-Operative does that, but that's not what AGC said. They said "SIGNIFICANT grower control" - Clancey Michael described it as a "Wesfarmers moment". Do growers have control of Wesfarmers? They sold off the Agriculture Arm of the business...will AGC's CBH do the same or definitely not.
    

Lastly the big killer, its up there with the well made but vacuous videos they've been releasing which are well filmed thought bubble devoid of actual facts and explanations. Yes there is a recent move from AGC that rings the bell that's covered in red flags.

In the last few days AGC have been critical of the CBH board for not furnishing them with a good and proper look at the books.

Ummm...how does that work?

A hostile take over wants access to all financials of the company, across all the business...from the board?

Do you want all commercially sensitive information as well?

Seriously here's where I have the biggest and most serious concerns about AGC...and their ability to know what the dickens they're doing.

If you cannot look at the Annual Report, recast the entire company financials using...no I'm not going to mention the tools to be used, but if you cannot recast the financials to find the weaknesses and strengths of the business, and determine exactly where they are then I don't think you're suitably positioned to help strengthen a newly listed company, let alone forge its new future.

This might not be something that should be a news flash.
AGC hitched its wagon to GrainCorp with a P/E ration of 60.

Everyone will look at a 60 P/E maybe a little differently but ask 5 share market investors, day traders or even stock brokers. I'd lay a bet at least one with come up with comments that include the words "financially toxic" or similar.

• What's coming out of AGC concerns me and others.
• They're not saying things that automatically suggest they know a board's rights, role and responsibilities are, what director's rights, role and responsibilities are.
• They're saying things that automatically suggest AGC don't know basics like how to read and recast the Financials of CBH's Annual Report.
• They're not saying things that automatically suggest AGC know how to read and recast GrainCorp's Financials.
• They are saying things that could cause someone else not versed in Director's rights, roles and responsibilities to think the CBH board is breaching the Corporations Act.
• They're saying the board should open their books to them completely...when its a hostile take over, not an exercise of due diligence prior to making Receivers/Administrators or Liquidators a purchase offer. CBH is not is financial trouble, there is no legal requirement to open all the books up to a take over group that cannot handle recasting the Annual Financials.
• They're not saying who they are beyond the Board of five, not saying what success fees each director would earn if the deal went ahead, what portion of success fees would be shared with whoever other investors/shareholders in AGC.
• Beyond thought bubbles and poor take over offers, they're not 100% clear on the Strategic Direction which AGC prefers nor is there any reason that IF listing as a Publicly Listed Company WAS SUCH A GOOD IDEA, why would not the AGC group prefer CBH do it themselves and save a very, very significant amount of CBH's money...how is that? For a group that might like to be viewed as a progressive group of selfless, altruistic benefactors of the grains industry, seems to be a lot of cash seeking going on. Including the $16 million dollar clause they later dropped.

Personally, I'd lean towards the current CBH board knowing what they're doing but possibly, like me they're unaware and wondering what the heck AGC thinks its doing. I have no evidence of the current CBH Board doing anything else than fulfilling its legal requirements as Directors under the Corporations Act. I have no reason to suspect they've not made a good decision for the members. AND PLEASE REMEMBER if you think the CBH board is trying to maintain its golden seats and or is "political" they're ALL guilty of breaking the Corporations Act and need to be investigated and prosecuted. Not one or two, the whole board. I'm not of that mind.

It reminds me of one line of Shakespeare who recently turned 400..."it is a tale, told by an idiot. Full of sound and fury, signifying nothing."

 

 

Australian Grains Champions Strategy

Would you not just submit the proposal, respect the board's complex job of assessing the deal in all its intricacy and how it will affect the growers in 1, 2, 5 and 10 years time, how it affects the business, the investment here and everywhere?

 

Would you not let the board work out what will change, how it affects dollars and cents of current enterprises and in the wings investment plans?

 

Would you go to the board and say this is what we want, this is what we think you want, tell us what you want so we can together construct a deal that benefits everyone well as best is possible

 

Or would you embark on a hostile take over, where you submit the deal and rather than wait for the deadline date to appear, fire as many shots off at the board to marginalise the board from the members, demonise the board to an extent to give the impression the board, going about its proper process of due diligence, is some how denying the members a right to decide?

 

You decide...look at the screen shots of internet posts on FB & Twitter...all BEFORE the deadline hit

This one above (6 days til deadline) highlights 2 points. Lets split and assess.

1. That growers do want to maintain control of CBH.
2. If the board refuses the offer is that grower control?

The first one...if the company is public floated, it becomes a publicly listed company with shares bought and sold on the ASX.

• Some farmers will sell their shares, its a pointless exercise if no one ever sold their shares.
• These shares could and probably would be bought by non farmer/grower investors otherwise its a failed company and again a pointless exercise floating.
• A future board can also release new shares of any number at a nominal price to raise capital for new ventures, investment, mergers & acquisitions etc which would then further dilute the grow control unless all the shares sold went to growers, that is if all the millions required came from farmers ONLY. Fanciful.
• And of course there's the other likelihood that being a saleable company, foreign companies like ADM would come in and get up to 20% of the listing, so too could GrainCorp and so to could any speculators, super funds or institutions. Like Wesfarmers grower control can and will be lost.

 

Now in a conversation with one AGC director the comment was "we would encourage members not to sell so as to retain control"

Curious. Absurd, I have to say it was a silly statement and sad I was thought to be so silly as to swallow that.

When I asked how it got a little more fluid and then obvious it can't be assured and loss of control is assured if the company is any good. Wesfarmers again a classic example.

Second point, how on God's green earth is it that the board doing their job, fulfilling their role, rights and responsibilities a loss of grower control?

Can it be so? No. Its disingenuous, or it could be deliberately deceptive or its a silly rant from someone clueless. You choose, I'm still stunned.

 

AGC presented the proposal to the board, not the members. They could and still can, lob the entire proposal in the media, release it to everyone and let the members decide. They won't. I'd assume there will be some commercially sensitive facets they wouldn't want anyone improving on and lodging a superior or equal bid. Hence the "break fee" arrangement in the beginning.

 

Now the strategy appears to be one of marginalising the board from the members, demonising the board by wrongly suggesting the board is denying the members a right. Humbug.
Lodge the deal, then snipe at the board's reputation and integrity to gather and garner all the possible support from the growers that is possible...forget about the deadline, keep firing whilst the deadline is in place.

 

It is worse than a hostile take over, its putting aside the facts about directors fiduciary duty and their legal requirements under law and suggest the members are being denied something.

Here's the thing, the board is elected to represent the members and has a lot of commercial sensitive information of its own it has to take into account when assessing the deal. You can't by pass the board and go straight to the members unless you want to talk about 30 pieces of silver up front and continue with "the devil's in the lack of detail approach".

The members elect the board to make these commercial decisions. AGC don't want you to have a group of people who are better placed to look at the deal than members. They want members with less information and less ability to assess the deal's impact on the entity, its operations, its strategic plan, its forward planning and its deals in process. They want members with less understanding or access to make a decision with less information than the board, the board is legally liable.

If the directors are failing in their fiduciary duty, its a breach of the Corporations Act and should be reported to ASIC immediately for a serious inquiry and possible prosecution under law. And yet AGC don't, the only thing they continue with is vacuous inferences that might cause some grower member's blood to boil. If you undermine the board, you undermine the members. That appears to be their aim...intentional or not. You decide

 

In the meantime, this is what you're going to get...

 

 

 

 

AGC has now lifted the "Break Fee" and wants the board to accept the proposal, or give the decision to the members only.

 

"Don't let CBH board stop you hearing the full story" WHAT??? Where, when? If they have breached the Corporations Act why wouldn't AGC lodge a complaint with ASIC?

AGC, could send the entire deal to the members, but the members haven't the full access right across the whole CBH business. Why would you do that?

I have never seen a deal lodged like this, where the deadline hasn't been met and the director's integrity is being questioned by those submitting the deal. The board is being criticised for a denial of rights that does not exist.

Stunning adversarial attack. Let the board & management go about their business, putting out brush fires from grassy knoll snipers who lodge the proposal in the first place...sorry but that's a pretty low & disrespectful line of business behaviour. One theory circulating is that AGC are making it too hard to accept in the hope the board will reject and then present enough signatures for an extraordinary AGM to try & roll the board. It was something I put very little stock in, but I'm seriously left wondering now. When the 18th rolls around we'll see if the deal is accepted or not and what happens then. But hindsight will answer a few questions.

Due process and due diligence will be denied if the board is bypassed and that may be the intent.

Is Rick Mazza of the Shooters & Fishers Party any good for WA?

Well truthfully I never had any reason to think he was bad for WA but under urging I did go look a long time back. I have had one phone conversation with Rick and later met Rick in a small meeting setting but that's a while ago now.

Upshot, short version yes I think he is good for WA on a number of levels & may well go down on the list of highly under rated elected public servants. I say that because he seems from my perspective at least very conversant with the fact that whilst he has a platform to stand on during electioneering he is a an elected, paid public servant who serves his electorate and the state.

 

Now, some might laugh and some might think that's as it should be, but its not altogether as common as it actually is.

Here's how, what and where...

 

If you want to stand for parliament via the Labor, Liberal or Nationals there's some commonalities and some differences but some people believe the commonalities and differences don't matter because they're all perverse or subtle twistings of how things should be.

 

One notable rising MP in one of the 3 major WA parties (yes who shall remain nameless) went and took out a large loan to renovate his house & it was a pretty good reno by all accounts. This then raised his house's market appraisal and despite the dip in equity from the reno loan the appraisal bumped it up a lot, allowing him to get a bigger mortgage to help fund his pre-selection for a better seat within the party.

 

Now how does it sit with you, he's far from alone in this pathway so he's maybe a good smart operator who saw how the system within the party works and developed a plan to best place him in the best seat available.

 

Does that make him determined, crafty or just innocently switched on?

Not sure but it put him at a distinct advantage at other players thinking about pre-selection.

  

Well before you even ask yourself that just ask yourself this, what of the others vying for pre-selection?

1. Who of them was most likely to be the best legislator?
2. Who of them was most skilled at getting across an issue or portfolio?
3. Who of them was a good parliamentary performer but also a good public servant serving the greater good for the state?

 

Well dear reader...we'll never know. We won't because that's one flaw in the problem that whilst the pre-selection process will vet the applicants and you'd hope weed out the less well equipped it can mean an excellent prospect won't make it onto the ticket.

Now the parties vary a little but in essence, what faction you belong to can make a huge difference. Who you side with in a particular branch can push you forward or see you pushed back. And then we get the introduction of the "ruling class" for want of a better term. Its the politicians or aspirants who are a 2nd generation politicians or had a long time serving as political staffers. These people know how the machine that spring boards you onto the ticket really works, they're all over it and a good legislator waiting in the wings may not. He or she is going to have to play the pre-selection game to get any ground under their feet.

It is odd, but its good that if 6 people throw their hat in the ring for pre-selection only one is picked...but how do you prevent a poor candidate with good mates, connections and money beating a damn good bloke or sheila?

You don't, you can't. you just have to hope its not common & if you're party of the party machine you just hope no one notices.

You see on the ticket, you see personage but you're not voting for a person, you're voting for a party's choice to be the face that collects votes and hopefully a seat for them.

 

You're really not voting for Dick or Dora. You're voting for the party and the pre-selection is a great training tool to craft the aspiring candidates into becoming party servants, not elected public servants nor electorate representatives.

So how does Rick Mazza depart from this cock up of s system?

He's the sole elected SF&P member of parliament. Both He and the Shooters & Fishers Party are THE brand on polling day and every sitting day and every time a microphone and/or camera jumps in front of him.

He has no party to hide behind.
Unlike Labor he's from a party where every vote is a conscience vote.
Unlike Liberal he can't rely on rusted on supporters who'll pour big bucks and influence behind him if things get troublesome
Unlike the Nationals he can't say in coalition "Well its a Liberal decision, we didn't have the numbers in cabinet but we fought really hard" when perhaps they didn't because they don't want to lose the extra $130,000 that being in cabinet brings.

Rick is pro 4WD-ing. Pro camping. Pro-fishing. Pro-shooting.
He's also pro Live Export and is the only WA MP who went down to the big anti Live Export rally to see and learn and ask questions, still walking away Pro Live Export.

 

Like his eastern states counterparts he's also pro-farming with the eastern states S&FP changing their name to the Shooters, Fishers & Farmers Party because Labor never helped them, Liberal a disinclined to leave the leafy suburbs and the Nationals over there have abandoned rural and regional Australian so bad there are now rival parties starting up in 3 states.

You don't have to be a shooter or anything else to consider the S&FP in WA but you should look at their efforts here. Look at the Upper House committee meetings. Go onto YouTube and type in "Rick Mazza" and see he does actually ask the hard questions as a legislator should, not as a party servant who serves the party's interest and pretends to be a representative of the electorate.

Having been a rusted on Nationals voter all my life and voting no other way ever, its an uncomfortable time for me as I have to consider carefully who to vote for because the Nationals have lost so much of its traditional country party values and culture.

So what's the plan come next election? I'm going to encourage others to do as I am and its in the best interests of the state. I'm going to do what to some might be counter intuitive but of late seems to be very effective. I'm going to rely on the House of Review to actually look after this state. And I'm also going to back a small group that has to get it right or they'll be in the wasteland. The small group that won't always do exactly as I want but they will explain properly in detail their reasons for their positions. They have no cabinet seats to sell the rear for, they have no ugly faction wars to worry about, they have no deep pocketed political benefactors in the shadows watching their every move with a hand on a trap door lever. The S&FP are actually encircled with a ring of fire called integrity and if they blow it, the lose everything. They have to be accountable for every decision, every stance or they're toast. Whether you shoot or fish or not, these unlikely elected public servants are your best hope yet. Even if you hate shooting, fishing and 4WD-ing, this one member party lives and dies by its every move, they're fully accountable. Something NO OTHER PARTY IS NOR WANTS.

THE UPPERHOUSE WILL BE THE SAVING GRACE OF THIS STATE & AS SUCH I'M NOT VOTING LABOR, LIBERAL, NATIONALS, GREENS IN THE UPPER HOUSE. Last thing we need is a rubber stamp upper house.

IN THE LOWER HOUSE VOTE FOR WHOMEVER YOU LIKE OR WANT

BUT IN THE UPPER HOUSE VOTE FOR SHOOTERS & FISHERS PARTY

 

 

 

CBH - The betting man has left the building.

So more messages came with questions, but not being on the inside I don't know any better than anyone else. Whilst its all my thinking typed out, may be that not a single word is original, unique or...or right.

1. Who are the AGC directors, who makes up the board of AGC?
   
   Firstly, the Australian Grain Champions have a web page that has a FAQ section. From there you'll see they make the comment...
   
   "The directors of Australian Grains Champion are grower directors Sue Middleton, Clancy Michael, and Brad Jones, strategy director Samantha Tough and finance director John Corbett. The shareholders of Australian Grains Champion are WA graingrowing families who support our vision for the CBH business."
   Most will know Clancy Michael and Samantha Tough are ex-CBH Directors, Mr Michael being a grower director, Ms. Tough being an Independent director. My understanding is Brad Jones & Sue Middleton are grain growers and John Corbett I don't know of unless he's the John Corbett who is Managing Director of Knight Hare the international real estate consultancy until his planned retirement in a few months time. No bios on any of them, so these are just my guesses. There's a comment section below, you can post your guesses if you like.
2. Who are the rest of the share holders of AGC?
   I don't know, it might be listed on their web page. It gives the impression that the shareholders are "WA graingrowing families" so maybe Samantha Tough & John Corbett are Independent directors with zero shares in the company. If they do have shares despite the impression given in the FAQs I think its a bit sloppy, not nefarious. Again you can post a guess in the comment section if you want, but pays not to guess. In short before someone asks, no I don't know how much of AGC is owned by how many and who. They might tell you, just ask. One way or another you'll get an answer...albeit a no comment is possible as anything. I don't know who all the shareholders are, who owns what percentage nor do I know if any on the board are directors with a shareholding or independent directors. Be interesting to know but I haven't asked. I do not know if GrainCorp has shares in AGC, my understanding is they do not but that's only going by the AGC FAQ that says " The shareholders of Australian Grains Champion are WA graingrowing families who support our vision for the CBH business."
3. Do I think the offer will be successful?
   Depends on your view and perception of success and at what point that is assessed.
   
   What I mean is, whilst there's been some strongly critical comments about the White Ant clause (my term, not theirs) of $16million being growers money, it was defended as being a way to protect any loss (to AGC) due to commercial damage via their deal being used to secure a better deal for CBH from a rival company. So with less than a week left on the deadline, the very important and at times highly defended clause has been abandoned. Most peculiar, now noise about the clause being dropped and continuing noise about why won't the board let the members decide. There's a deadline on the CBH board's decision and it does look like their being rushed a little via media and social media. Very odd. Wouldn't you make an offer and if there's an expiry date, leave them to their own devices to decide, perform due diligence or does the expiry date mean nothing?
   
   Ahh this stumped me and its likely it could go one of 3 ways.
   a) It makes no difference as the initial offer was never expected to be taken
   b) It was hoped it would be taken but if not an equally well planned "Plan B" was ready
   In both the above cases the required number of member's signatures would probably already accounted for a special AGM to push the matter further. To the members. Which is possible seeing they mention the members deciding so often. Constantly...over and over as if the board is denying the members of a right.
   
   Why? Think back to the media complaining about being locked out of the AGM. The members meeting. It is the one board meeting where the members get to hear about the year that was, the year that is expected to be, the financials, the ability to ask the board questions and the yes, the election of office bearers as well as all the direction members want to make part of strategy.
   The AGM is the Member's Meeting.
   
   If you think Plan A was fast, I'd expect (if this is what plays out) this Plan B will be fast also.
   - - - If CBH support the offer, I'd expect AGC will have the required number of signatures already on paper to call the AGM straight away.
   
   - - - If CBH reject the offer, I'd expect AGC will have the required number of signatures already on paper to call the AGM straight away.
   
   At an AGM your entire board could be rolled and replaced. Possible, yes. Likely...I'd be surprised. If velocity is a part of the AGC plan I'd expect it to be counter productive but where meetings get misused is where decisions are made, without all the facts.
   Generations of co-operative growth, I'd be surprised anyone wants to be rushed.
   
   If it played out that way, would you expect AGC to lay out the full proposal in all its entirety and give the members the exact same amount of time to assess the deal as the CBH board had?
   
   Or would you expect them to insist on an answer there and then in the meeting?
   I'd be hopeful but if a wager is involved I'd back the latter but prefer the former...if you're game, post your guess in the comment section.
   
   No I won't be taking any bets.
   
   Thing is, its a bit disingenuous to harp on about the board not letting the members decide.
   The members will because for it to happen 76% of members will have to vote for change of the structure before any float can happen.
   
   Another thing is, if 76% wanted it floated now, they could easily call the required special meeting (AGM) anytime they wanted and make the change, throw out the board (or not) and start the proceedings to float it on the share market. That option has always been there and can be done with or without the current board's support, with or without the current board at all and at any time, with or without AGC.
   
   The members get to decide, always have, always will whilst its a co-operative with that constitution.
   
   Other concerns remain. GrainCorp is still a publicly listed company with a dividend policy of 20-60% after tax profits going into dividends, their dividend yield was 1.17% and their P/E Ratio is a woeful 60. They also have a foreign owned major (not majority) shareholder in ADM who could easily buy 20% of CBH and perhaps...you know by now, post your guess in the comment section. Like me you can post guesses you do or don't believe in
   
   Oh yes I did say it could play out one of 3 ways but only mentioned 2.
   Deliberate. Time for you to stop and "SERIOUSLY THING FOR A MINUTE"
   There's a myriad of theories here...but a couple look more likely than others.
   
   Are you seeing selfless, altruistic benefactors of the WA Grain Industry or opportunists hoping to seize a business opportunity...which sadly is what business is more like these days, but that's life and not illegal or nefarious.
   
   Used to see deal makers reign once, where 2 parties thrashed out a solution that was beneficial for both parties to the point where either would happily recommend the other and happily deal with each other again. Nowadays its a little more dog eat dog or rather more hard nosed.
   I'd have preferred to have seen more of a deal making process with less comments about the board not letting members decide. They can and will one way or the other
   
   One of the more startling theories I've heard used amongst other things, the phrase false flag.
   If you're going to guess best to stick to what we actually know because that theorist had me thinking Elvis, JFK and aliens on the dark side of the moon would soon be implicated. That theory was admittedly 2nd or 3rd hand so it might have gone wonky via Chinese whispers. Listen to everything, test everything. That'll help sift things and save embarrassment. As we all know Elvis lives in North Perth runs a limo service and impersonates Elvis impersonators. Life's funny and a little bit ironic like that. Honest, true story.
   
   Well we do know the CBH Board is elected to assess such proposals, make decisions/recommendations as they have access to much commercial information the members don't have...among other things.
   
   We know they're AICD trained and under Corporations Act have a fiduciary duty to the members. We know some are saying the board needs to work in the best interests of the growers. Who says they aren't, won't or can't.
   
   I'm finally in agreement with John Lennon "Strange days indeed, strange days indeed"

CBH - The Empire Strikes Back - 2nd Edit 25/02/2016

Yes a deliberately misleading title, yes deliberately sensationalising the current drying of paint we call due diligence that we can't see (nor should we). So at this point may I say... "Made ya look"

However...seeing a couple people I didn't previously know emailed me I thought I better reply with their concerns. Firstly, not sure how you got my email address but well done and more well done because the Gmail account linked to this blog I probably only check once a month at best...so smart finding and lucky I read it now. Coulda easily been months before I'd read them.

Couple of pick up points from the emails...

1. "You people of the antiquated Co-operative mindset are of a socialist ilk..." - I think there's some folk who, through no fault of their own, have an ilk of their own and its keeping them from seeing things clearly as they are. To me at least there is no ilk to be had. In my shed I have Metric spanners, AF spanners, Whitworth spanners and bloody big hammers. Each is a tool for a specific job. Co-operatives are not anti now, not anti "commercial" and not anti Public Listed Company. They're all just different tools with different uses in different situations. As for Socialist ilk, sorry it is probably time to rethink that because that could be interpreted as simplifying it into 2 camps when there's so many shades between "socialism" and what ever some folk think is the opposite. Trying to lump Co-Ops into the same camp as a political ideology that caused an unknown number (millions) of deaths is pretty poor taste. People working together for a common goal, pooling resources to build quarantined benefits for the members and the community is not such a bad thing and isn't socialism. Should add that the "3rd sector" which is the Not-For-Profit sector, which includes Co-Operatives is huge in this country and worth many billions of dollars, employs thousands of Australians and along with delivering returns and quarantined benefits also delivers social dividends that don't show up on anyone's profit/loss or balance sheets. Another now gone Co-Op, United Farmers (now what's left of it being foreign owned) came into the market and other companies recognised the competition and got hard on the price competitive lever. Same happened with CBH's entry into the fertiliser market. Ironically another fault improperly levelled at CBH is it cannot deal with competition, yet it, like United provides it. As for United Farmers life...well weknow it got taken over by foreign entity right?
2. "It doesn't cost anything to assess the offer, that's scare mongering" - Well not intended to scare monger at all, its just a fact of doing business. Management doesn't ring me with numbers or concerns but I do know from chairing Business Committees on different boards, assessing deals, Mergers & Acquisitions, Partnerships...whatever, contain risks and opportunities and tallying them all up into digestible numbers worthy of making a good and proper decision on is not easy, is not quick and is not free. Will CBH tell you how many members of staff were involved in crunching the numbers, how many work/man hours were taken up by staff or how much outside advice was contracted in? I don't know, but I expect it to be very significant. Thing is whatever it costs is money well spent if you're thinking its a good idea to ensure the directors/the board are fully furnished with the best information possible to make the most informed decision possible. Its their job to do so, its required under Federal Law. Its quite serious and anyone trying to hide information can get in a lot of trouble too. Its not scare mongering, its highlighting an aspect some members may not be aware of. Its part of the process, it is what it is. It does not make it a dud deal or great deal, it equips the directors to fulfil their fiduciary duty and come to a decision.
3. "We'll just have to see which way the directors vote and hopefully some will get voted out on their decision" - Ah this is important. In a board, all the board is responsible for the resolution they come up with. Most boards rarely have a vote and dysfunctional ones will have someone pipe up with the old "Let the minutes record I opposed this decision completely". Dysfunctional because if its resolved by the board in a way you don't like you ONLY HAVE TWO ALTERNATIVES. Stay on the board and know you are 100% liable equally as every other director OR YOU RESIGN. There is no safe harbour saying "I opposed it but didn't have the numbers". I think a person should be encouraged to vote, encouraged to vote anyway they like but be aware its not a popularity contest. Its a skill set and its a position of legal liability as they carry out their duties every day. Now remember the AGM is the members meeting, its where the members get to ask whatever questions they want of the board. That's why many refer to it as the Member's Meeting. Its where issues are raised and people get to vote. I heard one person comment on the poor 51% turn out at the recent director elections. Disappointing maybe, but one should look at the average turn out because more often than not 30% is a good turnout at most board elections.
4. "You'll be disappointed when this goes through but you'll see it was the best outcome on offer" - My position on whether it stays Co-Op or goes publicly listed can best be summed up in just two short words "STAGGERING INDIFFERENCE", but I have a position I think is best for WA grain growers. Of course I'm not privy to the whole deal and how it affects CBH now & in the future and grain growers now & in the future. At its best this deal will have much complexity most of us will not be aware of. I have no reason to think the AICD trained directors on the CBH Board won't be able to fulfil their fiduciary duty, satisfy a reasonable person's test and exercise all their rights, roles and responsibilities. That being the case, if you elect directors you do have to listen to their decision/recommendation. Will this be put to the members for a final decision? Maybe, unsure what their procedure is on this. Time will tell but I wonder what happens if the offer is rejected. I'm kind of thinking there'll be another (un)Social Media backlash.
5. "Why are you so anti shareholder base, it brings better direction and a better strategy going forward" - I'm not anti shareholder, I hold shares in companies, that's not an issue and again, whatever works best for the majority of members is all good. The downside with the "shareholder base" is the entity is no longer controlled by the customers who are the owners. A distinctive division would begin with public listing, one between customers and owners, they're two separate groups, no longer one. With ownership goes the control and the profits. You need to work out which suits you best and a person who wants a lump of cash now, plus some shares they can sell once the company is floated because, well because they need the money now is not making a bad decision necessarily, they're making a decision that, based on their circumstances is the right decision. The director's position is simple, if they personally need the cash in a real hurry, they'd have to step aside from the decision, because their own personal advantage does not come before the greater benefit of the majority of members. I think the board has direction now, as I understand it, no one's been elected to the board on a platform of "I support and will endeavour to try and break up the Co-Op and see shares and cash are issued ASAP". So not seeing the wrong direction. As for strategy, that's board domain and whilst they may talk in broad terms about strategy at times, its the board province so if you think there's no strategy its either a guess on your part, a lie on your part, a lie someone else has told you and you've swallowed or its true and you have at your disposal a director happy to leak information out of the board. I have no reason to think the board has a leak...so I'd cautiously lean towards one the others, none are helpful. Sorry. Gotta cough up or pipe down sometimes. Which is it? :-)
6. "Yes shares would be up for sale if need be and borrowed against but we'd be telling people its better to keep their shares to retain control and that's what most people would do" - So conceding control of the entity IS a valid and important concern. Phew! That's one thing conceded, albeit by just 2 people :-)
   If shares can be bought and sold, people can and are entitled to buy and sell shares. Now if an overseas company like ADM were smart, they'd be thinking make a good share offer, below takeover tripping point and become a major shareholder, possibly elected a Nominee Director, which they'd be able to do and be quick to influence the direction of the company every legal way they possibly can. Maximise profits, shave off the less productive parts of the business, build on the other areas.
   ADM own just under 20% of GrainCorp. ADM is a foreign company.
   Just other things to think about because you cannot guarantee control or pricing or a lot of other things when you're just the customer with  some shares...and you cannot be assured all farmers will retain control because as saw in the case of Wesfarmers they lost control of the company and eventually Wesfarmers sold off all of its agricultural arm except CSBP...which supplies a lot of mines as well as farms.
7. SO CBH's AGM was yesterday and already I've heard 3 journalists comment about being locked out of the AGM and they sounded, well not angry but a tad miffed with an slight air of "I can't believe..." about them. They won't read this but if they did I'd shake an index finger at them and with stern voice bellow "LISTEN CAREFULLY..." but instead I'll just type it calmly.
   
                                    THE AGM IS THE MEMBER'S MEETING.
   
   Its the one "board meeting" where the directors outline the year that was, outline the year ahead, listen to concerns, report on financials and a number of other things the OWNERS (the members) need to know, or want to know. If they ask for the media to be absent it is not only valid, legitimate, its also perfectly understandable. This is a pivotal point in CBHs history. This is a very sensitive time with many question still unasked and unanswered. I understand that the members are noting there is no guarantee that a public listed company will stay grower owned, indeed it won't, it can't and it would be completely against the concept of being floated and listed if it could be solely or majority farmer owned. List it, the control is lost. Now I was told "Oh but we'd be encouraging shareholders to retain their ownership" which is a hollow false front. Its listed, it will go. As shareholders retire, they'll cash in for that extra cash shot in the arm...control gone.
   And who, what where about GrainCorp, the eastern states, part foreign owned company with a P/E ratio of 60 and a dividend return of 1.17%. It opens the door for ADM to own nearly 20% of CBH and GrainCorp could own that or more...and ADM own nearly 20%. If ADM ever get to succeed in their take over of GrainCorp (only just failed a few months ago)...well foreign ownership or domestic, its gunna be less farm owned and what happens after the dangle-carrot date of 5 years cap in the deal? Oh think usual business practice will pop up.
   And what of the AGC directors? Who are they and what do you know about them? How many of them have a history in grain, some do and some don't...and some have already said they're looking at a "Wesfarmers moment"...where grower control was completely lost.
   I read someone say "Yeah but Wesfarmers owns CSBP, don't forget that" - So, they have a less than 10% segment of their business that has market dominance in that area...owned by non growers. Point invalid and irrelevant.
   BE VERY CAREFUL WHICH WAY YOU VOTE, FOR WHAT YOU CHOOSE BECAUSE ITS LOOKING DECIDELY LIKE YOU WILL GET A GOOD SHORT TERM WINDFALL BEFORE YOU LOSE CONTROL AND POTENTIALLY LOSE OUT FURTHER IF IT TRULY IS A WESFARMERS MOMENT...
   And please remember it is not only legitimate for the members to ask for the media to step out of AGM discussions, its far from uncommon, its not nefarious, naughty, covert or anything bad...its the members exercising their right to have the Members Only at parts of the Members Meeting, the AGM.
8. Yes there's more...I'll edit/update other email lines needing a response. Might add, I welcomed their views, they weren't abusive and to their credit they do give a hoot. Some will ignore the entire process, just as many waste their director election votes