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A last-minute attempt by Social Credit to stop the sale of Westland Milk Products going through today was canned yesterday, but another avenue is being explored instead.
Up until yesterday afternoon, the minor political party was seeking financial and legal support to lodge an urgent court injunction to stop the takeover of Westland Milk Products by Yili, which is 25% owned by the Chinese Government.
The application for a court injunction would have had to be lodged by today, the day the sale of Westland kicks in.
Social Credit leader Chris Leitch, of Whangarei, said the party and its legal team were considering a number of grounds but they decided yesterday afternoon not to contest either the scheme of arrangement for the sale or the High Court decision to approve it.
They would instead focus on the Overseas Investment Office decision to approve the sale, Mr Leitch said.
‘‘Given that the board presented shareholders with only one option, and have been unwilling to give shareholders any information about the process undertaken, the potential to proceed against the directors in their individual capacities is also under the microscope,’’ he said.
This was because the Westland board had not pursued investigation of two significant options, he claimed.
One was a merger with Fonterra, and the other was to approach to the Government for a bailout through a Reserve Bank loan and/or assistance from the Provincial Growth Fund.
Mr Leitch said Regional Economic Development and Associate Finance Minister Shane Jones had claimed on July 18 that he was never approached by Westland about whether the Government could look at restructuring ‘‘and help shore up’’ Westland Milk Products.
However, it had been reported by RNZ on July 8 that government circles ‘‘might be breathing a sigh of relief’’ that Westland farmers had given Yili the thumbs up four days earlier.
‘‘That is because rejection of the Yili deal might have left the taxpayer being forced to pick up the tab,’’ Mr Leitch said.
RNZ had also reported ‘‘discussions about a potential bailout’’ within the highest levels of the Government, including ministers, had been considered.
Mr Leitch said it was clear that board members who were shareholders in Westland also stood to make ‘‘significant personal gain’’ from the outright sale.
Interest in the potential action by Social Credit ‘‘has been enormous, with a pleasing inflow of donations to support it’’.
He did not say by how much but the donations would be used only for the legal action, unless otherwise indicated by the donor.
- Brendon McMahon