AGRICULTURAL NEWS - Directors of poultry group Sovereign Food Investments appeared to chicken out of answering questions about the identity of a partner in a lucrative factory shop joint venture.
Questions about the identity of the joint venture partner were raised four times during the annual general meeting (AGM) on Thursday, but Sovereign directors not only appeared determined to ignore the inquiry, but offered no reasons why the information could not be provided.
Shareholder activist Chris Logan queried the company’s annual financial statements reflecting the factory shop joint venture in which Sovereign holds a 35% stake as a related party transaction.
The venture, which Sovereign paid no money to participate in, received goods and services to the value of R58.6m in the year to end February. Although this is small compared with Sovereign’s mainstay poultry business, the company’s share of this venture’s net income was R1.64m. The roughly 8% net margin achieved by the joint venture is considerably fatter than the margins managed by Sovereign’s poultry production business.
Sovereign chief financial officer Grant Coley said the factory shop was a joint venture with one of the company’s customers. "The customer has extensive retail experience, which we don’t have, and that’s why it was structured in that manner." The reason it was disclosed as a related party item was that Sovereign owned 35% of the joint venture.
Logan asked four times for the identity of the co-investing customer each time prompting consultation among the Sovereign directors. Eventually, Sovereign chairman Tom Pritchard, who indicated that he had consulted with the company’s legal representatives, snuffed out further inquiries. "We have answered your question. Can we move on?"
Shareholder activist Chris Logan queried the company’s annual financial statements reflecting the factory shop joint venture in which Sovereign holds a 35% stake as a related party transaction.
The venture, which Sovereign paid no money to participate in, received goods and services to the value of R58.6m in the year to end February. Although this is small compared with Sovereign’s mainstay poultry business, the company’s share of this venture’s net income was R1.64m. The roughly 8% net margin achieved by the joint venture is considerably fatter than the margins managed by Sovereign’s poultry production business.
Sovereign chief financial officer Grant Coley said the factory shop was a joint venture with one of the company’s customers. "The customer has extensive retail experience, which we don’t have, and that’s why it was structured in that manner." The reason it was disclosed as a related party item was that Sovereign owned 35% of the joint venture.
Logan asked four times for the identity of the co-investing customer each time prompting consultation among the Sovereign directors. Eventually, Sovereign chairman Tom Pritchard, who indicated that he had consulted with the company’s legal representatives, snuffed out further inquiries. "We have answered your question. Can we move on?"
