A battle is brewing at one of the state’s largest cattle production companies, with Yeeda Group’s Fitzroy River Limited launching legal action against major shareholder Beachline.
A battle is brewing at one of the state’s largest cattle production companies, with Yeeda Group’s Fitzroy River Limited launching legal action against major shareholder Beachline and director Mervyn Roderick Key.
According to a writ filed in the Supreme Court this week, Fitzroy River’s claim centres around an alleged breach of a 2012 shareholders’ agreement for Yeeda Pastoral Company, a cattle production and distribution business started two decades ago by three major landholders in the state's north; the Keys, Burton and Taberer families.
In that time, the company has grown substantially, occupying more than 1.2 million hectares of land in the Kimberley and exporting beef to the United States, Vietnam, South Africa, Japan, Singapore, Indonesia, Korea, New Zealand, Papua New Guinea and Canada.
The agreement was originally made between Beachline, Kilto Station, US-based company Fitzroy, Orlisk International and Kimberley Pastoral in 2012 and set out its objectives and how Yeeda Group would manage its affairs and those of its entities, including Yeeda Pastoral, Broome Sandalwood company, Bluebush Pastoral Company and Kimberley Freerange Beef.
But the agreement was modified to include Beachline, Fitzroy and investment company ADM Capital via subsidiary Twenty Two Dragons after the Burton family, which owned Kilto and Yeeda station, sold their stake in the company to ADM.
In May 2015, Beachline granted a security interest in favour of ADM Capital subsidiary Snowflake over all 1,109 of its shares in the company.
In the writ, Fitzroy's solicitor Dirk Fairweather from Fairweather Litigation claims Beachline breached the agreement by not obtaining the approval of the company’s other shareholders before mortgaging, charging or encumbering its shareholding in Yeeda in favor of Snowflake.
That same month, ADM Capital’s David Timothy John Whyte and Alexander Shaik, who were appointed directors of Beachline in May 2015 and February 2020 respectively, obtained 10 shares each.
In the writ, Fitzroy alleges that it requested clarification from Beachline on the nature of the deal it struck with ADM Capital, but that Beachline refused to give any information or be drawn on the loans made available by ADM entities to Beachline in relation to the Yeeda Group in May 2015.
Fitzroy further alleges the conduct by Beachline and its director Mervyn Roderick Key, who has also been a director of Yeeda Pastoral since April 2003, constituted a breach of the Competition and Consumer Act.
The US-based company is now suing Beachline and Mr Key for damages for allegedly breaching the agreement and has sought a court declaration that would make the security interest void and unenforceable.