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T/A Pacific shareholding makes Apple Fields an overseas company Corporate orchardist and dairy farmer, and aggressive opponent of the Apple and Pear Marketing Board, Apple Fields Ltd is now an overseas company. T/A Pacific Select Investments L.P., a Cayman Islands Limited Partnership owned in the U.S.A. has been given consent to acquire up to 29.99% of Apple Fields. At the time of the consent it owned 17.75% of Apple Fields and the consent was for it acquire up to a further 12.24%. The price given was $2,411,027.30 for 10.99%. The Press reported (“Apple Fields stake”, 12/1/95, p.23) that T/A’s shareholding had reached 28.59%. T/A has shareholdings in Kiwi Income Property Trust, and (recently reduced) Shortland Properties. It bought Fortex shares in late 1993 and early 1994, which it sold shortly before the company crashed. In February 1994 it took a 13.9% stake in Fortex without the proper notification to the Stock Exchange, which brought Securities Commission intervention. It lost $6 million selling that holding down to 9.87% (and bought into Apple Fields) shortly before Fortex announced a huge half-year loss in March (Press, “Commission to probe Fortex shareholder”, 12/2/94; “Foreign investor obligations”, 3/3/94; “Fortex in crisis: $40m-$50m loss expected”, 12/3/94). The rapid exit also led to a Securities Commission investigation (NZ Herald, “Fund manager goes from meat to Apple Fields”, 23/3/94). The OIC states: “The applicant states that over the past few years it has been the only substantial investor in Apple Fields and claim that their [sic] increased shareholding will provide a level of stability to the share register of Apple Fields and the opportunity to introduce offshore risk capital to New Zealand. The Commission is advised that T/A Pacific will not seek board representation or involvement in the day to day operations of Apple Fields.” What the benefits of “introducing offshore risk capital to New Zealand” farming are is not made clear. However what is clear is that they are by no means the “only substantial investor” in Apple Fields. In April 1994, the major shareholders were T/A with 17.75%, Pyne Gould Guinness 11% (since sold down, and the main source of T/A’s new shares), SoGen International Fund about 8% (based in the U.S.A., but owned by a French bank) and the executive directors, Tom Kain, Charles Kain, and Tom Suckling, about 38% (Press, “Apple Fields scrip sought”, 7/4/94). T/A “is believed to have $US200 million under management in a hedge fund focused on soft-commodity items” (NZ Herald, op cit). A revealing aspect of the sale is that nowhere does the OIC mention that substantial areas of highly productive rural land are being sold in the process. Apple Fields is “the largest orchardist in the country, with joint venture interests in and management control of 660 hectares of apple orchards around Christchurch” (Independent, “Two Toms trigger turmoil – but it’s no crusade”, Rebecca Macfie, 22/9/94, p.15). Probably more profitable are its 33 dairy farms “from Culverdon to Southland, with about 12,000 cows in total” (Press, “Apple Fields to target diary scene”, 6/1/95, p.28). Apple Fields recently bought the Killinchy Gold ice cream company, forming the Killinchy Gold Dairy Foods company, to further process some of that milk. A third of the shares are held by Killinchy Gold founders, Brent and Faye Thornton. The other two-thirds of the shares are held by Dairy Brands New Zealand Ltd, which is half owned by Apple Fields and the other half was to be sold to “processors and investors”, interest coming from “overseas as well as New Zealand” (Press, “Canty ice-cream firm takes Apple Fields into dairy manufacturing.”, 11/2/95, p.25). Apple Fields is not above a spot of speculation with the land it holds on the outskirts of Christchurch: its managing director, Tom Kain told the company’s 1994 A.G.M. that they were “evaluating plans to convert some of the orchard land for residential development” (Christchurch Mail, “Orchardist looks at real estate”, 19/1/95, p.3). Probably the company’s greatest claim to fame (or infamy) however is its longstanding crusade against the Apple and Pear Marketing Board which has “single desk” exporting rights for all pip fruit. Hardly unexpected from Kain, a member of the Business Roundtable, it is virtually an obsession with the company. Independent reporter, Rebecca Macfie described the office of executive director, Tom Suckling, as “battle HQ”. “A whiteboard along one wall bears the outline of Apple Fields’ strategy to force the board and the legislators to see the light. Mapped out are three current court actions pending against the board, the names of important and/or sympathetic politicians, and the chronology of the battle …”. They had set aside $50,000 in 1994 to pay for “the legal firepower that the company will bring to bear against the board”. They want to force the Board to allow Apple Fields to market its own brands of apples, rather than have to sell them to the Board. They claim they could receive higher prices through their own marketing. The Board would claim Apple Fields’ proposals would undermine its highly successful international marketing strategies for a wide range of types and grades of fruit, and would allow Apple Fields to pick the eyes out of the best markets. The Apple Fields campaign is strongly opposed by almost the entire pip fruit orchard industry, including even other corporate orchardists, such as Grocorp. The strength of feeling was demonstrated at the 1993 A.G.M. when orchardists from the Wairarapa and Nelson (who flew in aboard three aircraft) descended upon the meeting in order to bombard Kain and Apple Fields chairperson, Sir Allan Wright, with angry questions. The company had flown in “experts” from London and Germany to support its case. (Press, “Flying raid livens up Apple Fields meeting”, 23/12/93). That anger rose to a crescendo in March 1995 when it was revealed that Apple Fields, despite having by then been given consent by the Board to export 50,000 cartons of apples to the U.S., was exploring anti-trust action against the Board in the U.S. Advised by former Prime Minister, Geoffrey Palmer, the company had obtained an opinion from a U.S. anti-trust lawyer, Professor William Baxter, that it could take legal action against the Board in the U.S. MPs representing two of the main apple growing areas, Nick Smith and Michael Laws moved to discredit the action. Smith tried to table the Apple Fields legal documents in Parliament but was opposed by two fellow National MPs. Michael Laws described the company’s actions as “economic disloyalty of the very worst kind. It is unbelievable that a New Zealand company would even consider taking action against our own exporters. Given the importance of these industries and the potential implications for New Zealand, the action is disloyal in the extreme.” The Board chair, John McLiskie, denied that there was any Board liability and expressed confidence in its position, but dismay “at the action of Apple Fields in seeking an opinion on these anti-trust matters. It has the potential to damage not only New Zealand’s apple industry but other agricultural exports.” (Press, “Row erupts in pipfruit trade over US anti-trust legislation”, 17/3/95, p.29.) This was not Palmer’s first action supporting Apple Fields. In August 1994 he gave the company a legal opinion that the Board, as a competitor to Apple Fields, should not determine whether the company meets acceptable export standards. The power was fundamentally flawed and Parliament should repeal it. On that occasion, Michael Laws said “Sir Geoffrey’s opinion was another lamentable demonstration of Apple Fields wanting to kneecap New Zealand’s pipfruit industry. Yet again, Apple Fields are trying to distract the industry from their own financial and legal problems. It is a pity that Sir Geoffrey has allowed himself to be used in such a partisan way.” (Press, “Backing of Apple Fields criticised”, 20/8/94, p.39.) In the end this latest piece of legal scaremongering was shown to be merely yet more high stakes pressure tactics from Apple Fields. The government announced it didn’t think there was a lot to worry about from the opinion, and that in any case “the Government’s policy was to resist attempts by other countries to apply their law beyond their boundaries to New Zealand.” The Board announced that Apple Fields had assured it that no action would be taken on the opinion. (Press, “Govt confident on apple marketing”, 18/3/95, p.27). The proposal approved by the Board was for Apple Fields to sell 50,000 cartons of apples under the “Best Bite” brand to a large U.S. grower, distributor and exporter, Dovex Corporation. It would market them around the year with others from the U.S., Chile and elsewhere, and would in turn ship American apples to Aotearoa during our off-season. Apple Fields claimed they would gain $5 a carton from the deal. (Press, “Apple Fields to target dairy scene”, 6/1/95, p.28; op cit, 17/3/95, p.30.) It is ironic that Apple Fields should use the law as a weapon in its campaign. During 1993-94 it was investigated by the Securities Commission for the way it accounted for some of the farms it owned. It had “sold” some of the farms to its subsidiary Rural Super Bonds superannuation scheme, generating a paper profit, and then had leased them back, but not before guaranteeing any shortfall in the purchase price if the farms should be sold. The Commission criticised the method of accounting. The changes it demanded led to Apple Fields declaring a $489,000 loss in 1994, and to restating its result for 1993 which turned a $5.1 million profit into a $3.79 million loss. The superannuation scheme was designed to allow superannuitants to avoid the tax surcharge. (Press, “Commission looks at Apple Fields tie”, 17/12/93; “Apple Fields claims quality gap”, 22/12/94, p.33, 34.) The connections between the company and the former Lange/Douglas Labour Government don’t end with Geoffrey Palmer. Star attraction at the December 1992 A.G.M. was Roger Douglas, introduced by Kain as “Apple Fields’ man of the century”. Douglas used the opportunity to promote his (pre)A.C.T. policy platform and attack the Kiwifruit Board. The Apple Fields board of directors includes Rob Campbell. (Press, “NZ ‘suffering bout of nostalgia’”, 23/12/92, p.29; “Apple Fields loan from directors questioned”, 22/12/94, p.33.) These events are interesting on two levels. At the national level, they show that a vestigal awareness of national interest still exists in the government where farming interests are concerned. That awareness does not extend to other parts of the economy, nor to the effects that the new GATT agreement will inevitably have on control of agriculture and its marketing. At the company level, we see an undoubtedly innovative (if arrogant and destructive) company being taken over by an overseas company with nothing to add to it in the way of expertise. All the takeover does is ensure that more than a quarter of the profits will go overseas. It also shows a complete lack of consciousness of national interest by the Business Roundtable mould. In this case, Apple Fields actively encouraged T/A’s shareholding by creating shares for its initial foothold. Anglian Water: first project running wastewater treatment plant in Wellington The first move towards privatisation of our water supplies is seen with the approval given to Anglian Water International Ltd to carry on business in Aotearoa. It is a subsidiary of Anglian Water PLC of the U.K. “Anglian Water International has been selected as the successful tenderer to build and operate two wastewater treatment plants in Wellington for the Wellington City Council. The Commission is further advised that Anglian has considerable experience and expertise in this field, having built over 10,000 plants in 40 countries.” The amount of this investment was not released until June, when it was released on appeal: $150,000,000. Aspinall increases shareholding in Christchurch Casinos In a decision originally totally suppressed, but in June released in full after appeal to the OIC, Aspinall (NZ) Ltd, which is 85% owned by J.V. Aspinall of the U.K. and 15% by J.H. Osborne of the U.K., was given approval to acquire a further 7.66% of Christchurch Casinos Ltd for $3,679,987. “… two of the existing shareholders in Christchurch Casinos Ltd wish to sell their aggregate 25% shareholding to the remaining shareholders.” A similar transaction, for the same amount, was approved for another Christchurch Casinos shareholder, Premier Hotels (Christchurch) Ltd, in February 1995 (see that month’s decisions for more detail). Christchurch Casinos Ltd before these transactions was owned 23% by Aspinall, 23% by Premier Hotels Christchurch Ltd, and 54% by New Zealand shareholders. OPSM buys seven stores, becomes biggest dispensing optician in Aotearoa Archers Properties Ltd, a subsidiary of Australian prescription eyewear manufacturer and retailer OPSM Protector Ltd, is taking over Optique Eyewear Ltd and 45% of Bryan Matthews Optical Industries Ltd. The prices paid are suppressed. According to AAP, OPSM thus acquires seven-store chain, becoming Aotearoa’s biggest group of dispensing opticians. Optique trades in Auckland and Hamilton. OPSM also has two stores in Wellington “after recently buying a 45% interest”. That presumably refers to Bryan Matthews. OPSM has 219 stores in Australia, including 65 “express” stores. Intriguingly AAP says that “OPSM is prevented by New Zealand Government regulations from acquiring more than 45% of a local optical dispensing business” though the OIC reports it having consent to acquire 100% of Optique. (Press, “OPSM buys into NZ chain”, 12/1/95, p.22.) Tasman Properties buys Benjamin Developments Tasman Properties Ltd, now controlled by SEA Holdings Ltd (Hong Kong) and Grantham Mayo Van Otterloo and Co (U.S.A.) is acquiring Benjamin Developments Ltd for $30,000,000. “Benjamin Developments Ltd and the companies in the McConnell Dowell group have been involved in legal proceedings with Tasman Properties Ltd relating to the Coopers and Lybrand Tower in Auckland. As part of the resolution of these proceedings, Tasman Properties Ltd will acquire Benjamin Developments Ltd.” See November and December 1994 decisions for more detail of this dispute, which was settled for $30 million. Black family of Australia increases shareholding in Bowker Hldgs, farm owner The N.M.G. Black 1980 Settlement Trust, whose beneficiaries are members of the Black family of Australia, is acquiring a further 2.563% of the share capital in Bowker Holdings No 13 Ltd for “up to $1,000,000“. Bowker is a Black family holding company which owns land at 8 West Coast Road, Christchurch on which there is a sawmill leased from Addington Joinery Ltd (in receivership). The family is also 49.5 percent owner of Craigpine Timber Ltd, ‘Glencairn’, at Dipton, Southland and the Mendip Hills Station in Canterbury.
Internal restructuring of ownership of Guardian Assurance In internal restructuring, the Guardian Royal Exchange, a subsidiary of Guardian Royal Exchange PLC of the U.K. is taking over another subsidiary of the parent, Guardian Assurance Ltd for $0. |
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