Memorandum submitted by A.S.E. Crisp and
Sons (DFoB 20)
SUMMARY
The time scale between receiving the PwC report
and this comment sheet being due in, is four days, so please understand
that this document is the only way I can submit my observations
in the time available, and as a farmer I want these points answered
by someone, if not by your inquiry. I have attempted to use the
correct terms throughout, but hope the ideas behind the questions
are relatively easy to understand if I have not used the correct
term. Whilst acknowledging the current fragile state of the Dairy
industry, there are occurrences which happened over the years
and in recent months with DFOB, which need addressing and explaining.
People should be made accountable for their decisions. The EFRA
committee is in a good position to attempt to get at the rationale
behind some of the lamentable decisions made, and to discover
if they were for personal gain at members' expense.
1. ACC purchase/DFOB salaries/Consultancy fees
2. Misleading newsletters from DFOB
3. Conversion of retention capital to shares
4. Involvement of PwC in compounding farmer losses
1. DFOB members tended to be farmers of
the "old school" highly committed to the Co-op ideal
and work ethic, and trusted their company directors to a) do the
job they were well paid to do, and that b) directors would have
the members' best interests at heart, rather than paying themselves
the best salaries and consultancy fees around, and the least for
the milk supplied. With this in mind, I would like the ACC purchase
looked at as to why it was purchased at an inflated figure, and
why consultancy fees were paid at such a high level. It seems
from the PwC factual receivers' report, that the DFOB decisions
taken here on our behalf did not promote the interests of DFOB
members,
2. We were not kept informed of the true
state of the company, and were still being promised "jam
tomorrow" at a series of face to face meetings in December
2008 when Roger Taylor did a splendid PR job for DFOB. The
DFOB newsletters pointed to a successful future with a re-launched
lean, mean company in 2009.
3. Subsequently the capital retention (loans
in effect) from members were turned into worthless shares, without
individual consent or signature, which is a very questionable
process. Is it legal?
4. Were PwC acting for HSBC, DFOB, both
at the same time, one after another, or what. Why does the bank
take preference over DFOB members for the assets. PwC were in
as advisors back in February 2009. Or was it earlier? Why was
DFOB not put into receivership back in March, apart from the amazing
"spring flush" argument. PwC have stated that DFOB was
kept going to prevent a fiasco within the dairy industry whilst
the "spring flush was seen through" This enabled DFOB
to take our May and June milk without paying for it, adding to
the DFOB members' losses. We should not have been held responsible
for not disrupting the whole industry in this way, and it is a
point which needs a lot of clarification, as to the timing of
the company closure and why the members were thought to be a suitable
sacrifice "for the greater good".
5. The EFRA inquiry has the opportunity
to dig deep into the running of DFOB, and hopefully prevent the
same thing happening to a co-op in the future.. Some of the board
decisions taken on members' behalf would seem from the outset
quite likely to not have a successful outcome, and to be expensive
choices. (ACC purchase/Tesco local choice/consultancy fees etc)
The question in many members' minds is whether some of their company
leaders were basically incompetent and batting out of their league,
or just out to line their own pockets with no thought for DFOB
members who trusted them to run the company. This latter point
of lining their own pockets seems to be the best success that
DFOB had.
Some people have made a vast amount of money
out of this company over the years, and unfortunately it is not
the loyal members who did the basic hard work of milking the cows.
In conclusion I hope that all the points I have
raised will also have been raised more succinctly by many others,
wanting some transparency from the situation, and I just hope
your inquiry will provide some answers.
A S E Crisp and Sons
September 2009
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