Synlait co-founder and former chief executive John Penno has filed a complaint about the company questioning who can vote at a shareholders’ meeting on September 18.
The notice of complaint was filed to NZ RegCo and the Takeovers Panel, which is responsible for enforcing the rules NZX markets operate under.
It asserts that under the NZX listing rules and takeovers code, Bright and a2 Milk Company should not be able to vote on resolutions relating to the recapitalisation of Synlait.
If they were excluded, this would leave only shareholders other than Bright and a2MC being able to vote on the two resolutions at the meeting.
Combined, Bright Dairy and a2 are bankrolling a $217 million injection into the company.
Penno is a 2.3% shareholder, having previously served as CEO, non-independent chair and as a director of the company until May 2024.
In a statement released on NZX, Synlait said it disagrees with the complaint and considers that the NZX listing rules and takeovers code have been complied with.
“The special shareholders’ meeting is a critical step for the future of the company. If the resolutions are not approved and the recapitalisation is not implemented, Synlait would likely need to cease trading and initiate a formal insolvency process unless it were to become clear that further support would be forthcoming from Synlait’s existing banks,” it said.
It said such support from the banks would be hard to secure in such circumstances.
Independent chair George Adams said: “Since I joined Synlait in May this year, the board has followed a rigorous process. The independent directors remain confident that this is the optimal offer structure for the company.”
The company said it will engage with the regulators in order to have the complaint dismissed before the shareholders’ meeting.
At this stage, the complaint has no effect on the resolutions to be voted on at the shareholders’ meeting nor the timing of the meeting, which will proceed as scheduled.
Synlait announced the meeting on August 20 following external advice and approval.
It will ask its shareholders to approve resolutions relating to the proposed recapitalisation of the the issuance of $185m of shares to Bright Dairy Holding Limited and of $32.8m shares to The a2 Milk Company and the settlement with a2MC and A2 Infant Nutrition Limited.
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