Our Sugar Terminal Assets are of National significance and to date have been satisfactorily managed in the best interest of all in the Sugar Industry. Millers own a third of the shares, while growers own approximately two thirds. Shares are in two categories, Milling Shares, M class, and Grower Shares, G class. The Board of Sugar Terminals Limited, STL, consists of two Milling industry representatives/Directors, two Grower representatives/Directors and an independent Chair person. One Miller Director currently comes from Mackay Sugar Limited and one from Wilmar Sugar Limited.
There will be an AGM, on 20/10/16 in Brisbane and on rotation one of the Miller Director positions is technically made available. The person to rotate is from Mackay Sugar and has offered themselves up for re-election. Usually a simple, unchallenged process, maintaining a balance on the Miller Director side of the Board. However, this year Wilmar Sugar, while retaining one of the two Miller positions owing to not being on rotation, is now contesting the second position as well.
If successful Wilmar will control both Milling positions on the Board of STL. As STL has M and G class shares, only Milling companies may vote for the Milling Directors and only Growers may vote for the Grower Directors.
As Wilmar has a significant percentage, I think 51 per cent of the Milling Shares, which therefore equates to approximately only 20pc of the combined Milling and Grower shares, it has the opportunity to control the vote for the Milling Director category and thus may control the two Milling positions on the Board, locking out a balance of having another Milling company representative on the Board. This has the potential of having the two Milling Directors voting as a block, against the two Grower Directors and thus forcing the Independent Chair into a constant casting vote situation, under significant pressure each time.
While Wilmar is perfectly legal in doing this, with only 20pc of the combined Milling and Grower share total, in my opinion, it is not in the spirit of how the STL Board was set up to run, serving the best interests of all in the Sugar Industry.
Kerry Latter, Canegrowers Mackay
