The Irish Farmers Journal understands Kerry Co-op has sought legal advice on whether a shareholder vote is required for this joint venture to proceed. It’s understood the co-op’s legal advisers have said a shareholder vote is not technically required under the rulebook of Kerry Co-op.
However, it seems unlikely that the board of Kerry Co-op could justify pushing ahead with any joint venture deal without seeking some form of shareholder approval, particularly from its dairy farmer shareholders who will be most affected by any joint venture deal.
The Irish Farmers Journal has obtained a legal opinion from Michael Lavelle, a senior partner in Lavelle Solicitors, Dublin, on the rulebook of Kerry Co-op.
Lavelle’s interpretation of the rulebook is that an Extraordinary General Meeting (EGM) could be convened to discuss the joint venture deal if 20% of the co-op’s A and B shareholders signed a petition calling for an EGM. This would mean getting the signature of more than 1,300 shareholders, which is no easy task but is certainly a possibility.
In the event a vote of shareholders is called, the Irish Farmers Journal understands that Kerry Co-op also sought legal advice on which shareholders are entitled to a vote on the joint venture deal.
Kerry Co-op’s legal advisers said the rulebook does not specifically mention which shareholder groupings were entitled or not entitled to vote. As such, the co-op was informed it could be taking a risk by not allowing every shareholder to take part in an EGM vote.
Kerry Co-op has 13,500 shareholders, which are classed as A, B and C shareholder.
Active milk suppliers are classed as A shareholders in Kerry Co-op, while farmers who have ceased milking over five years ago are classed as B shareholders. There are roughly 3,350 A shareholders and 3,400 B shareholders.
All non-farming shareholders in Kerry Co-op, of which there are roughly 6,500, are classed as C shareholders.