Winston Peters says ‘heads should roll’ at Fonterra over its loss on China's Beingmate, says the buck stops at the top

Deputy, and soon to be Acting Prime Minister, Winston Peters appears to be backing his senior MP’s calls for Fonterra’s Chairman John Wilson to resign.

Speaking to reporters before going into Parliament on Thursday, Peters lambasted the dairy co-operative’s 2015 investment in China's Beingmate.

In March Fonterra wrote down the value of its Beingmate investment by $405 million to $244 million. Fonterra CEO Theo Spierings quit Fonterra in March. Beingmate has been struggling for much of the period since Fonterra spent $756 million on its 18.8% stake in 2015 and made a loss this year of about $208 million.

“Someone needs to explain why that investment was made in the first place. It wasn’t wise, wasn’t sound,” Peters says.

“I think that a hundreds and hundreds of millions dollars [in] losses needs an explanation and needs a response in the market. It needs some accountability. Heads should roll,” he says.

When asked whose head, he was evasive and would not give a straight answer.

“Those who are responsible,” he says.

Is that John Wilson?

“Well, with the greatest respect, find out all the people who are involved but it goes to the top and the buck stops there.”

When pressed, he said he “can’t believe someone responsible would be in the job still.”

Again asked if John Wilson should step down, he said: “I’m telling you I cannot believe that massive loss in any respectable first world market, that someone could still be in their job.

“That is the complete and total answer,” Peters says.

On Wednesday, Regional Economic Development Minister Shane Jones told reporters he thinks it’s time Wilson stood down.

“I thoroughly believe this: as the Chief Executive leaves Fonterra, the Chairman should in quick order catch the next cab out of town,” he said.

Peters told reporters he made it “very clear before the election what I thought of that massive loss and that massive mistake.”

In September 26 press release from last year, Peters blasted Fonterra’s Beingmate investment and former CEO Theo Spierings’ $8.3 million salary.

“This kind of fat cat payout is why shareholders need to be given a say on pay. Shareholders need to be given the power to hold the directors and bosses to account,” Mr Peters said.

Before going into the House on Thursday, Peters suggested it had taken too long for someone to criticise Fonterra on the Beingmate investment.

“The fact I made a lot of statements about it sadly has taken until the 13th of June for people to catch up – mainly you guys,” he said, referring to the media.

Fonterra has refused to comment on the issue. 

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31 Comments

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Not only should the big bosses be sacked and have their bonuses clawed back (if possible) but the Board Members that Fonterra appointed to the Beingmate board as well.

No, It starts way before that. Doing business in China requires very strong due diligence. Beingmate was not suitable for Fonterra.

Time for John Wilson to find a scapegoat.

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Peters is exactly right Wilson should resign. This constitutes complete non-performance by the Chairman. he is happy to take astronomical bonuses when the organisation is doing well so the opposite has to follow. And this was a monumental f u.

Make hay while the sun shines. Now farmers down on the farm, if they are any good, will fully understand the what that means. But from the look of it the Fonterra board & executive would have a completely different interpretation of that old adage. More than likely you will find it in the manual of self interest.

I'd be more worried about what tech/I.P. and other sensative information Fonterra will have lost as a result of doing business with its Chinese partners...

It would be naive to think they're not doing academic and industrial espionage. Especially when we roll out the red carpet and let them right in. Let's not forget Labour and National both have some suspicious MPs in their ranks.

https://www.afr.com/news/asio-warns-vice-chancellors-over-chinese-spies-...

Anyone with family back home in the father land is susceptible to blackmail and CCP doesn't exactly care about human rights.

Those who expose this publicly suddenly have their house broken into and laptop stolen.

You deal with China your intellectual property is open to China
Why the surprise
American businesses know this very well
China is the Chinese Communist Party in case anyone thought they were dealing with a democracy
They play by Chinese rules to win
Their leader just ruled himself leader for life
What did anyone expect to happen to Fonterra intellectual property ?

It is up to the Shareholders of Fonterra. If they want Wilson gone then he will go. I don't really see why any politician should be getting involved.

The shareholders only appoint nine members to the board, the rest are nominees.
Read this for how to get your mates onto the board.
https://corpgov.law.harvard.edu/2017/04/07/director-appointments-is-it-w...

So they are like list MPs then? Or - to paraphrase Harvard - in Winston’s case the best way to be a troughing unaccountable life time politician is to be a troughing unaccountable lifetime politician?

Certainly jobs for mates.
Its hard to find out how many international companies indulge in the practice or in what proportions of nominees.
Someone on the site may know...

The Fonterra Board: There are nine farmer elected board members. All nominees must have a financial interest in a supplying dairy farm. There are three appointed directors. The three appointed directors are ratified at the AGM.

Reading between the lines NZF felt Fonterra had a direct "line" to the previous govt - ie they were heavily "involved" in Wellington decision making whether it be irrigation schemes, environmental decisions on river pollution, double dairy by 2025 and the like.

This is NZF saying that involvement will not be continuing but don't shoot the messeger. There have been some dreadful decisions made by Fonterra and normally heads should roll. If the decision is the responsibility of farmers then NZ will soon get an indication of how let down our farmers feel.

Ok, got that.

The direct line comment seems correct.

Q. Why do you think the RBNZ kept interest rates low in the face of exploding house prices?
A. So some over leveraged farmers could keep operating.

Watch Netflix "The China Hustle" Fonterra got scammed.

Yep - in China, it's not illegal to steal foreigners money .

If Jone plays his cards correctly,then he can fill the vacacy himself in 2020 when he and Peters get turfed out of office.

JUST HOLD ON A MINUTE .............. Fonterra is a co-operative that is owned by its members . The Government has absolutely no business poking its nose into a business in which it has no financial or shareholding interest .

Someone should tell these clowns to take a somersault ...........

Its simply not their business and the co-op members who have voting rights can decide on who runs the Co-op .

It isnt General Motors or even Danone.
Born out of legislation and taking a role of the Dairy Board.
We were a sweet little socialist country once....

Danone Beingmate,, Brazil ,Venezuela.

Winstone Gander chasing the latest ambulance, hissing and flapping various body parts.

A touch of the Bard seems appropriate: Macbeth, Act V, Scene V.

There would have been a time for such a word.
To-morrow, and to-morrow, and to-morrow,
Creeps in this petty pace from day to day
To the last syllable of recorded time,
And all our yesterdays have lighted fools
The way to dusty death. Out, out, brief candle!
Life's but a walking shadow, a poor player
That struts and frets his hour upon the stage
And then is heard no more: it is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.

Bob Dylan,
The answer my friend, is blowing in the wind.....
He is back in August...

Went to his last concert, "won't get fooled again" it was awful and deafening and a Lot of punters walked out.
Was OK in 78 though.

Every concert is different as he continually reinvents the arrangements.
Its unfortunate you caught a poor one, we did too in Sydney one year then the following night a new song list and it was marvellous.

Damn, maybe I'll go one more time.

Correction to article - Theo did not quit Fonterra in March. He is still there and in fact the Board knew back in November 2017 he was leaving. IMO John Wilson announced that Theo was leaving in March (he brought the announcement forward from planned announcement date) in order to take some heat off himself due to Beingmate loss. JW is, afterall, up for re-election this year.
Wilson said Fonterra had begun a search for a successor in November last year, and that Spierings would stand down "later this year". It was now shortlisting candidates. https://www.stuff.co.nz/business/farming/102458601/fonterra-chief-execut...

Shane Jones and Winston should resign. Immediately.

Democracy folks. People have the right to voice their opinions, even MPs - you don't have to like it, or even read it (click elsewhere), but you don't have the right to stop it.

If they publicly state anything that is provably untrue, they'd face defamation lawsuits - but nothing defamatory here. The decision making for this would have had to have been signed off at the very highest levels of the organisation.

Fonterra posts big profits, people take big salaries and bonuses because they were "responsible". Fonterra posts big loss, the same holds true imo.

What Mr Jones and Mr Peters have done is raise this onto the media front pages once more, ensuring that even the farmers in the furthest back-blocks are aware of their opinion.

What the farmers/shareholders do with that information come voting time, is up to them.

imo - If I had a major shareholding that my family was dependent upon (not just now but for generations to come), led by a CEO on a massive salary, taking large bonuses each year, sign off on a decision like this leading to such a monumental loss, I think I would be reconsidering where my vote went.

Mistakes happen certainly, but it's prudent risk mitigation to ensure accountability for such, and de-risk appropriately - which might mean replacement with someone who would be more risk-averse and perform more due diligence before jumping in.

Or a cynic might say that Jones and Peters have got wind that Wilson is standing down - there is chatter of this and has been for a wee while now - and so come out guns blazing, and then when Wilson announces his retirement, they claim to have had some sort of influence in it?