He hit back at statements previously made by shareholders John Shrimpton and Blair Gallagher the co-operative was bankable without significant capital investment, saying the two men were wrong.
Their statements were made without the benefit of insight gained from discussions SFF had undertaken with its current lending syndicate and other potential lenders in the past 12 months, Mr Hewett said.
Mr Shrimpton and Mr Gallagher were also without an understanding of the seasonal funding demands, That was a fundamental issue and point of difference, Mr Hewett said.
SFF yesterday issued the notice of a shareholder-requisitioned meeting to be held in Dunedin on August 12.
In a statement, Mr Hewett said the SFF board remained unanimous in its view the 50:50 partnership with Shanghai Maling was in the best interests of shareholders and the co-operative ahead of the special meeting.
In October last year, shareholders approved the partnership with Shanghai Maling with an "emphatic'' 82% of votes cast, he said.
"If anything, the imperatives and potential benefits for SFF from this transaction have increased since then.''
Shanghai Maling's $261million investment for a 50% stake in SFF's business was clearly in the best interests of the co-operative.
It would put SFF into a strong financial position and provide the capital to accelerate the "plate to pasture'' strategy globally and invest in technology, equipment and improving plant efficiencies, Mr Hewett said.
"Our business will also have a privileged position in China, the fastest-growing market for red meat in the world.''
The accounts released with the notice of motion showed SFF had income of $1.03billion in the six months ended March, compared with $1.22billion in the previous corresponding period, $414.6million less than forecast.
The operating profit was $19.9million, compared with $76.5million in the pcp, which was $65.4million below forecast.
SFF reported a loss of $2.6million before tax, compared with a profit of $50.6million last year.
The reported loss compared with a forecast profit of $43.4million.
The financial statements showed the group had working capital of $281.1million at balance date, compared with nearly $450million in the pcp, and net debt of $277.8million, a reduction both on last year and the forecast.
Trading conditions had continued to be more challenging than budgeted after the six-month trading period, Mr Hewett said.
"We now expect full-year net profit before tax to be only at a break-even level, compared to our budget of $61.1million - $46.4million after tax. This is clearly disappointing.''
The events of the first six months could not be offset in a season when overall end market values for beef and sheepmeat in New Zealand dollars had averaged below last year and industry volumes processed were down on last year.
In the nine months to June 26, national numbers for lamb and beef processed were down 3% and 4% respectively on the same period last year.
Mr Hewett said the board was frustrated and disappointed Mr Shrimpton and Mr Gallagher had encouraged a small group of shareholders to question the approval gained last year.
They had required SFF to hold a further special meeting and they were continuing to agitate for the transaction to fail.
The board rejected the allegations made by them and independent bodies had found no basis for the allegations, Mr Hewett said.
Subject to Overseas Investment Office approval, SFF was bound to complete the transaction with Shanghai Maling.
The meeting, whether the resolution was passed or not, could not change that outcome.
The status quo was not an option, Mr Hewett said.
The disappointing financial performance this year illustrated again the volatility of the industry and the risks associated with the current capital structure.
"We remain under lender pressure to address these issues. The board believes Messrs Shrimpton and Gallagher do not appreciate, and so are not fairly or accurately representing, the restructuring the co-operative would need to undertake should the Shanghai Maling investment not proceed.''
Mr Shrimpton and Mr Blair said earlier co-operative principles did not seem to have been applied to the proposed sale of SFF to Shanghai Maling, which should have been subject to a special resolution of shareholders.
Instead, the SFF board held the view the proposal was not a major transaction and it could have approved the deal by itself.
The men believed the proposal to transfer 100% of SFF's existing business into a joint venture Shanghai Maling would control was, in terms of the Companies Act and the constitution, a major transaction which could only be approved by a special resolution of shareholders.
To date, the SFF board had offered no explanation as to why such a complex restructuring of the co-operative was needed.
The alternative to the proposed sale was to retain ownership of the co-operative for those who would be following in the footsteps of current shareholders, the men said.
"Preserving 100% ownership will enable us to control our destiny by retaining flexibility on raising capital, if any is needed, without the pressure of receivership, likely pay greater dividends later and participate fully in the future upside of our ‘plate to pasture' strategy.''
Main points
• Shanghai Maling remains committed to 50:50 partnership with SFF.
• SFF under lender pressure to reduce its reliance on debt.
• Reported loss for the six months ended March.
• Special meeting will be held on August 12, in Dunedin.
• SFF board not bound by result of special meeting vote.