15/10/2009 - 00:00

CBH corporate revival call

15/10/2009 - 00:00

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IT'S not quite the bush telegraph but the good old-fashioned town hall meeting is still being used to good effect in rural Western Australia.

CBH corporate revival call

IT'S not quite the bush telegraph but the good old-fashioned town hall meeting is still being used to good effect in rural Western Australia.

Rural giant CBH Group has been forced to respond to a series of such meetings aimed at reigniting the debate over the cooperative's structure as the only major mutual organisation left in Australia's grains industry.

Esperance farmer Nils Blumann convened the meetings and while attended by just 145 of CBH's 4,700 members, the meetings voted strongly for the demutualisation of CBH.

That momentum has prompted the free market-oriented Pastoralists & Graziers Association to call its own town hall meeting, at Wongan Hills next week. PGA is bringing in the firepower of three past CBH chairmen, Alan Watson, Robert Sewell and Tony Critch, to further fuel the debate.

Last month, CBH chairman Neil Wandel wrote to members to reassure them about CBH's financial strength and returning value to members, including whether growers wanted value returned to them through products and services, discounted services, rebates or equity.

In the past decade efforts to demutualise CBH, which requires 75 per cent of members to agree, have failed. Last year, the grain handler looked at separating its business to allow the more growth-orientated businesses to have a different ownership structure.

However, that move hit a hurdle when the Australian Tax Office sought to remove the tax-exempt status of the grain-handling cooperative. An appeal by CBH is due to be heard in the Federal Court next week.

"The best approach is to finalise our strategy first, then determine what structure will best deliver long term success and return of value to members," Mr Wandel wrote.

However, PGA meeting convenor Gary McGill is scathing of CBH's strategic decision-making capability because rural politics governed board elections.

Mr McGill said CBH was financially restrained despite news this week that it had again secured around $1.5 billion worth of funding to finance payments to growers for the coming harvest.

He said this left CBH vulnerable at a time of immense structural shifts in the industry.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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