Mark Patterson: Overseas investments need greater checks and balances

Opinion 26/06/2019

By Mark Patterson, MP, New Zealand First.

There’s a stench emanating from the West Coast. In this case it’s the $1.5 million plus sale bonuses waiting for Westland Milk Products CEO Toni Brendish and her senior management team.

Chinese Company Yili Industrial Group have offered them this bounty if they secure the selloff of the 100 plus year old Co-op.

There’s a strong perception of conflict of interest and selling it to the public as a ‘retention bonus’ to stop an exodus of senior management are merely weasel words. Any incentives of that magnitude would surely influence the decision making process of senior management and the advice that they provide their board and shareholders.

We have of course seen this movie before.

When Shanghai Maling took over Silver Fern Farms, the same incentives were in place. 

The poor old Westland Cow Cockie’s who are heads down bums up on their farms will be required to make a decision soon as to whether to sell their family farms or not. After generations of investment by themselves and their forebears, they should at the very least have the security of knowing the people involved in structuring the deal are not in any way conflicted by personal gain.

This begs the question, why is there no other alternative deal on the table?

Why have shareholders not been offered a joint venture option or different ownership levels so that they at least have a degree of control over their long term future? Better still, why was Fonterra not fully courted to offer a Cooperative solution with the retention of New Zealand farmer ownership?

Instead it was an ‘all or nothing’ situation.

Westland Milk Products shareholders will vote as they will in the next couple of weeks, it is their prerogative. However it does bring in to stark focus the necessity of a ‘New Zealand Interest’ test being strengthened in the pending legislation to reform the Overseas Investment Act.

While this might be a good short term deal for the shareholders it is hard to see how it is in the long term best interests for New Zealand to lose control of these key supply chains in our most economically important industry.

Maybe then we will have a genuine check and a balance so that personally incentivised interests don’t get a disproportionate influence over the final outcome.

Mark Patterson is a New Zealand First MP.