In 2010 Kerry Co-op was unable to pay a dividend because rules set by the financial regulator required the co-op to write down the value of investments which had lost value. In Kerry Co-op’s case, the value of One51 had to be significantly written down resulting in the co-op having no reserves. As such, the payment of a dividend to members could not take place. A significant number of shares in Kerry Group plc had to be sold to cover this loss and to create a new reserve.
This loss resulted in the ratio of Kerry Group plc shares to Co-op shares reducing from 6.5 to 6.12. There is no guarantee that this could not happen again if investments undertaken by the co-op do not work out. The main reason shareholders voted against the resolution put forward at the SGM of Kerry Co-op was to prevent the board from accessing any shareholder funds for a new investment strategy. Trust in the board is at an all-time low among Kerry Co-op members following the board’s attempts to mislead members regarding the outcome of the defeated resolution at the SGM.