Companies Office rejects NZ First complaint over Silver Fern deal

Co-op yet to confirm extension to Thursday deadline to complete Shanghai Maling transaction.

The Companies Office has rejected a complaint by NZ First leader Winston Peters over Silver Fern Farms’ handling of a controversial deal with Chinese company Shanghai Maling.

The Dunedin-based meat co-op said it had received a letter from the Companies Office saying it had considered Mr Peters’ complaint and “the registrar has not identified any evidence of a breach of s138A of the Companies Act 1993.”

A Companies Office spokesman confirmed the decision, saying the Registrar had completed initial inquiries into the matters raised by Mr Peters and “has not identified any evidence of breaches of the Companies Act 1993. 

“This investigation is now complete, but as always the Registrar will reassess the position if there are new events or further evidence.”

It is understood that Mr Peters was concerned Silver Fern’s directors had breached their duty to act in good faith and in the best interests of the company, particularly by not seeking shareholder approval for a major transaction.

Silver Fern chairman Rob Hewett said the Companies Office decision vindicated its position.

“The accusation was that directors did not act in good faith or in the best interests of the company. That was clearly not the case. The decision of the Registrar of the Companies Office supports the position we have consistently taken on this.”

In May the Financial Markets Authority responded to complaints about the transaction, saying it had concluded that Silver Fern’s notice of meeting and transaction documents were not misleading or deceptive.

Silver Fern shareholders voted last October in favour of a deal to sell half their business into a joint venture with Shanghai Maling, a Shanghai-listed pork processor 38% owned by the Chinese government.

The transaction has been challenged by Mr Peters and a group of Silver Fern shareholders led by farmer and investment banker John Shrimpton.

However, there is increasing uncertainty about the deal itself as a June 30 deadline to complete it looms. The only condition remaining to be satisfied is Overseas Investment Office approval. The OIO has said it is waiting for information from Shanghai Maling before it can make a recommendation.  

On Saturday Silver Fern said it was negotiating an extension to the deadline.

 “We continue to believe that we will achieve OIO approval,” said chief executive Dean Hamilton. “However, we need to allow more time to provide the required information and then for the OIO and ministers to have sufficient time to review.”

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