Shareholder concerns voiced amid Kerry Co-op meetings

Kerry Co-op shareholders remain very concerned about the co-op board’s proposed Redemption Scheme for Kerry Co-op shares, according to an alliance of members opposed to the move.

Shareholders received the official documentation for the scheme last week.

Meetings are currently being held by the co-op; a meeting took place last night, Monday, May 13, in the South Court Hotel, Limerick, with another scheduled for tonight, Tuesday, May 14, in the Ballyroe Heights, Tralee.

Sean Bugler, a dairy farmer from Scarriff and a former Kerry Co-op director, says the proposed scheme is “causing a lot of concern and confusion” among shareholders – particularly as the scheme is opening for applications before it is voted on at a Special General Meeting of the co-op on June 19.

Shareholders are advised on every page of the document to seek independent financial, legal or tax advice, according to the Kerry Co-op Concerned Milk Suppliers and Shareholders Alliance.

The group notes, however, that there are a number of “errors and inconsistencies” in the document – including two different versions of one of the rule changes.

This makes it very difficult for professionals to advise on the scheme and to sign off on an application, according to the group.

Bugler, who is PRO of the alliance, said: “Accountants are telling their clients that the proposed Share Redemption Scheme is not suitable for most shareholders.

“The shares are not being redeemed at their full rate, the selling price won’t be set until after the applications are submitted, the purchase or transfer price or other capital losses can’t be deducted.

The sale of a small number of shares could result in the seller being taxed at the high rate. No accountant can calculate a client’s final tax bill for 2019 at this stage.

Bugler added that the board of Kerry Co-op is saying the scheme will be better for those on the lower tax rate, asking why then is the board not giving low-income shareholders the full value of their shares.

“Why is money going to be taken from low-income shareholders – mostly pensioners; what will be done with this money? There are no answers in the document sent out by the board,” he said.

He also challenged the board on their assertion that the shares are locked in and there is no other option for discharging them except via the proposed scheme.

“There are other options which would deliver a better outcome for all shareholders,” he said.

The Clare farmer added that the board of Kerry Co-op should withdraw the scheme now and focus on the Electoral Review which must be completed by the board before June 30 next.

“A new Kerry Co-op board with a fresh mandate will be able to focus on what is best for all shareholders and milk suppliers,” Bugler concluded.

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