Tuesday 29th May 2012
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Wool Board Disestablishment Co has made its final report, having met its 2003 target for distributions in a decade-long process that left chairman Bruce Munro vowing never again to be involved in such a thankless, poorly paid task.
The directors of DisCo will resign and unrestricted access to the shell will be transferred to NZAX-listed Wool Equities, the company established to preserve and use some $300 million of tax losses for the benefit of growers.
DisCo has made total distributions to growers of $69.5 million, close to the $71.4 million identified in a restructuring plan agreed with the government in September 2003.
A process Munro had assumed would take a couple of years took almost a decade, thanks to two unsuccessful lawsuits, the second of which involved parties associated with the production and marketing of Saxon brand merino wool.
That was resolved in April last year with costs awarded to DisCo, which made its final distribution of former NZ Wool Board assets in July 2011.
“It’s the most poorly paid job I think I have ever done,” Munro told BusinessDesk. It was the kind of process he vowed “never again to be involved in.”
“It is with some satisfaction that I am able to present this final report of (DisCo),” he says in his final commentary as chairman. With all distributions made and residual issues resolved, “I can report that DisCo’s obligations under the Wool Industry Restructuring Act 2003 have been met.”
Munro moved to DisCo from the Wool Board, where he had been chairman when it was demutualised in the face of shrinking profits from the fibre. Exports of wool amounted to $785 million in the 12 months ended April 30. In the June 2001 year they were valued at $1.1 billion.
Does Munro believe the wool sector is in better shape than it was a decade ago?
“Market prices would indicate that that could be the case,” he said. “I do think there’s a realisation a good number of the things the board used to do still need to be done.”
It had proven “incredibly difficult” to get any coordination in the industry. “They are the cause of their own destruction until they can get together and cooperate.”
Wool Equities shares last traded yesterday at 10 cents. They traded as high as $1.50 in October 2006 and has since sold out of its biotech businesses, which included the extraction of proteins from wool, to focus on building markets for wool. At today’s price, the company has a market value of $3.4 million.
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