German agricultural conglomerate BayWa has come under fire in New Zealand over a perceived failure to deliver on promises it made in the months preceding its recent takeover of fresh produce exporter Turners & Growers (T&G).
In its anonymous Shoeshine column, leading newspaper the National Business Review (NBR) accusedBayWaof reneging on its stated promise to preserve the workforce at T&G by not making 'material management changes' at least for the first nine months and of pulling strings behind the scenes to convince trader minister Tim Groser to approve the buyout.
Less than one month after New Zealand's Overseas Investment Office (OIO) approvedBayWa's NZ$157m acquisition of a 72.5 per cent share in T&G in early March, the Auckland-based marketer announced a host of new appointments to its board and upper management, which saw many of the group's New Zealand staff replaced by representatives from its new majority shareholder.
Then in October, new T&G chief executive Geoff Hipkins completed a major reorganisation of T&G's corporate structure, following a strategic review initiated in collaboration withBayWaitself.
The restructuring saw subsidiary Delica rolled into sister company Enza, as well as new executive appointments and the departure of several industry veterans from key positions at the group, such as Alistair Petrie and Snow Hardy.
According to NBR, that action went against public assurances given byBayWaCEO Klaus-Josef Lutz, who it said had 'put great emphasis on employee continuity, a stable workforce and retaining technical experience and longevity of the staff'.
The Shoeshine column continued: 'Somewhere along the line his andBayWa's view changed and Hipkins was the perfect candidate to ring in the changes.
'The tune appears to have changed around the same time that Lutz and Hipkins met with trade minister Tim Groser in June and July this year.'
On schedule
However, Lutz is reported to have denied the accusation, telling the newspaper: 'We are asbolutely in line with the time schedule brought to the OIO and discussed with stakeholders of T&G.'
Hipkins, meanwhile, said the company had responded to concerns about Baywa's dealings wiht the OIO.
The column's writers remained unconvinced: 'What strings didBayWapull to gain OIO consent for its takeover of Turners & Growers after investment company Guinness Peat Group offered its stake up for sale?
'More to the point, whose strings didBayWaexecutives pull during the crunch negotiations, which were unusually speedy considerig the fact that the OIO was busy dealing with the Crafar farm fiasco at the same time?'
Crafar was New Zealand's largest family-owned dairy business, but went into receivership in October 2009 before becoming the subject of multiple prosecutions for reported pollution offences and poor animal welfare between 2007 and 2011.
