HARDLINE grower activists who last year made a concerted push to halt AWB’s share normalisation plans recently made an unlikely convert in the form of business commentator Stephen Mayne.
Mr Mayne has a high profile as a shareholder activist and took a strong stance in favour of the company’s normalisation, which was passed last year.
In the process, he ruffled a few feathers through traditional strong single desk heartlands in NSW and WA, where bands of growers remained committed to the concept of AWB as a grower-owned and operated business, labelling those opposed to AWB creating a single share structure as ‘troglodytes’ and ‘Luddites’.
However, writing for The Australian Financial Review earlier this month, Mr Mayne has expressed dismay over the way the company has been handled since its normalisation, in particular the capital raising venture the company has embarked upon, labelling it disastrous for small retail shareholders.
“I got a lot of grief from growers last year for vigorously supporting an end to their board gerrymander, but now they've been proved right: the interests of farmers have not been protected by this new board comprising some familiar faces from the directors' club,” Mr Mayne wrote.
Strident opponent of the normalisation process, Rankin Springs, NSW, farmer Jock Munro said he had mixed feelings about Mr Mayne’s about-face.
“It is good that he has come out and said this, but I wish he had not gone along with this blind economic theory that didn’t take into account the issues for the wider wheat-growing community to begin with,” he said.
“I just hope some other business commentators now follow his lead.”
Mr Munro said his stance on AWB had been vindicated by the performance of the company since normalisation.
“It’s been an absolute disaster, the board has lost the plot, with a string of bad decisions," he said.
“Ideas like Brazil (where AWB has had to sell off its business after some heavy losses) was a poor model right from the start.”
He did not accept that many of the decisions had been made before the company was normalised.
“A lot of the board members are the same people and have been there long enough to take responsibility for what is happening there.”
Mr Mayne agreed with Mr Munro that AWB was selling out its retail investors in favour of the bigger players, saying the capital raising scheme delivered majority control to institutional investors.
He claimed that the balance of the company ownership has gone from 68pc retail investor ownership six weeks ago, prior to the capital raising, to 39pc after the share offer.
He even likened the company to notorious share predator David Tweed, saying the capital raising structure offered little protection for grower share owners.
Mr Mayne sweepingly described ‘many’ grower shareholders as ‘not particularly financially literate and vulnerable’.
AWB corporate affairs manager Peter McBride denied that the share offer was skewed in favour of the institutions.
“Retail shareholders were offered a 1:1 entitlement with an opportunity for oversubscriptions so it is difficult to argue they had limited access,” Mr McBride said.
“All shareholders had an opportunity to participate, and arguably the opportunity for retail shareholders was better than the opportunity for institutional investors as they had time to see what happened to the share price before deciding whether or not to participate.”
Responding to Mr Mayne’s claims that grower shareholders could not participate due to similar capital raising ventures at fellow agribusinesses Elders and GrainCorp, Mr McBride said the board could not manage these external factors.
“The lack of access to funds some retail shareholders may have is not something a Board can manage, nor was the timing of the Elders or Graincorp raisings.”
He defended the way AWB publicised the capital raising venture, by advertising in the rural media, rather than a mail-out as advocated by Mr Mayne, saying it was a more cost and time efficient way to get a message out to grower shareholders in a short space of time.
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