Chinese interest causes stir
The reality of allowing Fonterra to debut in the sharemarket has hit home to its farmer shareholders as the dairy giant refuses to confirm or deny a report it is talking with a Chinese state agency about investing in Fonterra units.
A shiver ran through the 10,500 farmer-shareholder base of New Zealand's biggest company yesterday when the Wall Street Journal reported from Beijing that the China Investment Corp (CIC), an investment institution and wholly state- owned company of the People's Republic of China, was eyeing a stake in Fonterra's new unit fund.
CIC, the fifth-biggest country fund in the world with nearly $600 billion in assets under its management, manages a chunk of China's massive foreign exchange reserves.
Alarmed farmer opponents of Fonterra's share trading among farmers (Taf) capital restructure, which is launching the $500 million shareholder fund, said their worst fears about losing 100 per cent control and ownership of their co- operative were realised.
Farmers narrowly supported Taf's introduction in a vote in June.
Fonterra would not be drawn on the report.
In a written response, it said the Fonterra Shareholders Fund institutional offer was being made to institutional investors in New Zealand, Australia and "certain other overseas jurisdictions in Asia and Europe".
Federated Farmers dairy chairman Willy Leferink said the China report underscored the need for farmers to approve constitutional protections around Taf at Fonterra's annual meeting next month.
Canterbury dairy farmer Leonie Guiney said farmers were "now scrambling to retain some vestige of control".
"I'm absolutely sick of the lip service being paid to 100 per cent farmer control and ownership.
"We need to ask some extremely hard questions of our leaders."
Coaxing Taf over the vote line after a two-year debate, Fonterra directors argued Taf was essential to provide permanent capital for the company.
- © Fairfax NZ News
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