AWB meetings with wheat growers in Western Australia last week reinforced the high level of grass roots support for AWB constitutional reform under the new wheat export marketing arrangements, the Managing Director of AWB Limited, Mr Gordon Davis, said.
Mr Davis said over 500 wheat growers attended the town-hall meetings in WA last week and nearly all those he spoke to were supportive of AWB reform and were prepared to spread the word to other wheat growers about the benefits of a competitive AWB.
“Over 60 per cent of WA growers who voted at the Annual General Meeting in February supported AWB reform,” Mr Davis said. “Following the town-hall meetings in WA last week, I am more optimistic than ever that a large majority of wheat growers will support the latest reform proposals at the next shareholder meeting on 21 August.”
However, Mr Davis expressed disappointment at the latest tactics of the Wheat Growers Association (WGA) in its bid to entrench an out-dated and costly governance framework within AWB Limited despite the introduction of a competitive wheat export market.
"The old guard is clinging on to an out-dated and costly governance framework to maintain their agri-political influence”, he said. “Now that the old world order of the Single Desk has passed away, their motives have been laid bare. The old-guard are men of the past without any vision for the future.”
Mr Davis said the WGA had made several incorrect claims in a letter to wheat growers and the media. In a letter to wheat growers dated 20 July, the WGA claims that:
the four dissenting Directors on the AWB Board are being gagged and marginalized by threats of legal action in the media
the recent AWB grower road-show in WA was ‘pushing the boundaries’ when responding to grower enquiries; and
a submission by the Australian Bankers Association to the Government earlier this year said that there would be no financial constraints on AWB.
The facts are quite otherwise:
AWB has not gagged the four dissenting Directors. A dissenting statement by those Directors was sent to all AWB A class shareholders, and one of these Directors, Colin Nicholl, spoke at several grower meetings last week at my invitation.
AWB has not threatened to take legal action against the four dissenting Directors. However, all Directors have an obligation to act in good faith in the best interests of the company as a whole. ASIC or other interested parties may choose to take legal action if they consider there has been a breach of that duty.
It is not correct that AWB has been ‘pushing the boundaries’ in its WA road-show. AWB has simply been pointing out the realities of the new competitive wheat export arrangements.
The WGA has taken the ABA submission out of context and distorted its conclusions to support their arguments. The ABA submission said that there would be no shortage of finance for wheat growers under the new wheat export marketing arrangements. It did not say that AWB would not be constrained by its dual class shareholding in accessing funds in future; and
In the new wheat export environment, AWB will need access to capital at competitive interest rates in order to be competitive with regional bulk handling monopolies and multi-national grain traders. And, as shown in the latest report from Value Enhancement Management (issued by AWB this week), to get access to that capital at competitive rates, the company must move to a single class of shares.”
Mr Davis said the WGA President, Bob Iffla, had a conflict of interest in AWB reform and had failed to declare this in any comments he had made to the media or to wheat growers.
“Bob Iffla has become the Corrigin Lake Grace Zone representative on the WAFarmers Grains Council and now has a conflict of interest because of that organization’s commercial strategic alliance with the Emerald Group, a competitor of AWB under the new wheat export marketing arrangements,” Mr Davis said. “Mr Iffla should declare he has a conflict or resign as a representative on the WAFarmers Grains Council.”
Media contact: Peter McBride, 03 9209 2174 or 0417 662 451
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