Ex-director mum over shots

Former Fonterra director Harry Bayliss is refusing to explain himself after taking another pot shot at the company's chairman Sir Henry van der Heyden.

Mr Bayliss, who successfully ran an email campaign to oust Waikato-based director Earl Rattray from the board in 2008 for his support for a public listing of the co-operative, is accusing Sir Henry of steering Fonterra towards demutualisation and calling for a change in its leadership.

Mr Bayliss made the accusation at a recent meeting of Federated Farmers dairy section in Wellington. Asked, by the Waikato Times, to explain his allegations, since Sir Henry has consistently said a public listing was off the table since the 2007 bid failed, Mr Bayliss was not prepared to discuss his accusations.

"I am not prepared to make any further comment. It was a discussion at Federated Farmers and that's where I want to leave it," he said.

Sir Henry, who led a failed listing proposal in 2007, described Mr Bayliss' claim as sad and disappointing,"

Sir Henry admitted he had "got it wrong" when he asked farmers to consider a public float of 20 per cent of the company and Fonterra would remain 100 per cent farmer owned.

"It's politics from the past and it's time we moved on. We should be focusing on going forward," Sir Henry said.

The proposal was quickly taken off the table after push back from the co-operative's 10,500 farmers who wanted to maintain control.

"I have made it consistently clear to everyone that demutualisation is off the table under my leadership."

Since Mr Bayliss' email campaign Sir Henry and the Fonterra board have led the company through extensive consultation with farmers which has led to a re-write of the constitution. A farmer's shareholding no longer needs to match his or her production and can be as much as 20 per cent more.

Sir Henry said farmers he had talked to since Mr Bayliss' comments were disappointed.

"The company has come through a difficult economic environment and it's time for unity," Sir Henry said. "We have come through the global recession in good shape."

Richard Myers, a Cambridge farmer and Fonterra shareholder, accused Mr Bayliss of sour grapes.

Mr Bayliss was deputy chairman of Kiwi Dairies while Sir Henry chaired bitter rival, New Zealand Dairy Group, before the two were swallowed by the creation of Fonterra in 2001.

"We have got such capable people running Fonterra," Mr Myers said. "It's just sour grapes. It's not doing any good. It's not going to solve anything."

Mr Myers was angry Mr Bayliss' email campaign against Mr Rattray led to "a very experienced director" being put off the board.

James Houghton, Waikato Federated Farmers Dairy Industry Group chairman who heard Mr Bayliss speak at the Wellington meeting, said the former director was part of a proactive group of farmers who held the co-operative structure close to their hearts.

Mr Houghton thought Fonterra was probably quietly working behind the scenes to find external capital after only a third of its shareholders responded to a call to buy extra shares. He felt Fonterra would have to look at external capital if it was to grow by 20 per cent, as the Government wished.

Sir Henry said he, the board and Fonterra Shareholders' Council were focused on directing Fonterra through stage 3 of restructuring, which would allow farmers to trade their extra shares. But Fonterra was not working to a timetable and would consult farmers when it was ready.

- © Fairfax NZ News