NZSA proposed resolutions for special meeting

PGG Wrightson Ltd | NZX Announcement 1







8 MARCH 2024
NZSA proposed resolutions for special meeting

PGG Wrightson Limited (PGW) advise that the company has received a proposal from the New
Zealand Shareholders Association (NZSA) to add additional resolutions to the special meeting being
convened to consider the matters advised to the market on 13 February 2024. PGW understands
that the NZSA has sent this proposal to all PGW shareholders.
The PGW Nominations Committee (which comprises the full board) will meet shortly to consider the
additional resolutions, alongside consideration of the updated disclosures that the existing and
prospective directors have recently made on their credentials (as a key part of the Nominations
Committee process underway, as outlined to the market on 13 February 2024).
A copy of the NZSA’s letter which it has sent to shareholders of PGW is attached.


For media enquiries contact:
Julian Daly
General Manager Corporate Affairs / Company Secretary
PGG Wrightson Limited
Mobile: +64 27 553 3373
Email: companysecretary@pggwrightson.co.nz
Registered Office:
PGG Wrightson Limited
1 Robin Mann Place, Christchurch Airport
Christchurch 8053, New Zealand
Phone: 0800 10 22 76 / +64 3 477 4520
Website: pggwrightson.co.nz

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NZSA letter to PGG Wrightson Shareholders Page 1
March 6
th
2024


March 8
th
2024

Information relating to recent announcements from PGG Wrightson in relation to Agria
(Singapore) Pte Limited

The purpose of this letter is to set out NZSA concern with proposals made Agria (Singapore) Pte
Limited (“Agria”), a 44.3% shareholder of PGG Wrightson (“PGW”), and the potential impact on your
investment.
The NZ Shareholders’ Association (NZSA) is a non-profit organisation that has been advocating for the
interests of investors in New Zealand’s capital markets since 2001.
We have your interests as shareholders at heart.
NZSA’s concern relates to the action by Agria in requesting a special meeting of shareholders, as per
the announcement made by PGW on February 13
th
, to consider the following resolutions:
- The removal of three (out of four) existing independent directors.
- The replacement of these independent directors with three independent directors nominated
by Agria.
- A return to the Board for former PGW Chair Guanglin (‘Alan’) Lai.
A successful vote in favour of these proposed resolutions will result in an increase to the size of PGW’s
Board from the current five directors to six – comprising two directors as direct representatives of Agria
and four additional directors, three of whom will have been nominated by Agria.
NZSA discussed this situation in a blog article on its website (and sent to NZSA members) on February
16
th
.
We see the current situation at PGW as one of the worst cases of board interference by a majority
shareholder in the last few years. Consequently, we have taken the rare action of contacting individual
and corporate shareholders.

NZSA believes that these changes will have a detrimental effect on future outcomes for smaller
PGW shareholders.
We intend to vote any shares for which we hold an undirected proxy AGAINST these (or similar)
resolutions.
Your vote matters. If you can’t vote at the meeting, please complete this form and email to PGW ’s
share registrar, Computershare at corporateactions@computershare.co.nz - this will allow NZSA
to vote on your behalf.

NZSA letter to PGG Wrightson Shareholders Page 2
March 6
th
2024
NZSA Proposed Resolutions
Should a special meeting be called, NZSA has instructed the PGW Board to also include further
ordinary resolutions to be proposed at the meeting, as set out below.
1. That the Board determine the constitutional settings required for PGG Wrightson to include a
minority investors voting regime within its Constitution, whereby a controlling shareholder
with greater than 30% of shares would not be able to vote on the election or re-election of
independent directors.
2. That a revised Constitution, including any amendments determined by the Board under
Resolution (1), is tabled for consideration by shareholders as a special resolution at the next
Annual Shareholders Meeting of PGG Wrightson.
3. That Meng Foon be removed as a Director of PGG Wrightson.
Further information relating to the rationale, definition and benefits of a minority interests regime is
shown in our supporting commentary. We also discuss our position on the current Board below.

Why is NZSA voting against the resolutions proposed by Agria?
Independence. We believe the proposals will reduce board independence. The proposed directors
will have been nominated by Agria and would likely serve on the Board under the ongoing patronage of
Agria. See our supporting commentary as to why independence matters for minority shareholders.
No Reason. Shareholders have been given no reason for the proposed board changes. While PGW is
currently enduring a cyclical downturn, NZSA retains confidence in most of the current independent
directors on the Board for the reasons set out in our supporting commentary.
Conduct and Quality. NZSA is concerned about the history of conduct and quality issues associated
with Agria representatives – including allegations made against former Chair Lee Joo Hai in Singapore
that resulted in his arrest in 2023 and the settlements reached by Alan Lai with the US Securities and
Exchange Commission and NZ Overseas Investment Office (OIO) in 2018.
We note Alan Lai’s interest in resuming his directorship of PGW comes less than 45 days after the
expiry of the court-approved settlement reached with the OIO in late 2018 (see Additional Resources).
We understand that Alan Lai has insisted to current Directors that he be appointed as PGG
Wrightson’s Chair. NZSA notes that the appointment of Chair is a matter for the Board, not the
nominated Director. We speculate that this insistence is likely to reflect Alan Lai’s state of mind in
relation to PGG Wrightson, in that he regards PGW as his own private company.
Long-term interests of PGW. PGW appears to have increased debt in recent years to maintain
support for dividend payments. NZSA is concerned at the influence of Agria in Board decisions related
to dividend payments. Following the appointment of new Chair, Garry Moore, announced on February
16
th
, we note the following in the subsequent release of PGW’s interim results on February 27
th
:
“The PGW Board has by a majority determined PGW will reinvest capital back into growing the business
by suspending the interim dividend in order to avoid adding debt in the face of rising interest costs.”

For further information on NZSA’s position, please contact ceo@nzshareholders.co.nz.

Oliver Mander
CEO, NZ Shareholders Association

NZSA letter to PGG Wrightson Shareholders Page 3
March 6
th
2024
SUPPORTING COMMENTARY

Minority Interests Voting Regime
Should a special meeting proceed, NZSA will propose resolutions binding the Board to determine the
amendments required to PGG Wrightson’s constitution to enable the introduction of a minority
interests voting regime and to present a revised constitution for consideration at the company’s next
Annual Shareholder Meeting.
Advocacy for the introduction of a minority interests regime into New Zealand’s listed environment has
been a feature of N Z S A’s work over the last two years, including submissions to NZX Limited.
Were such a regime currently in place, it is unlikely that Agria would have the ability to implement the
changes to the Board proposed in their resolutions.

Why does NZSA advocate for a minority interests regime?
1. Improve confidence of investors in NZ’s capital markets. NZSA notes that 33% of NZX-listed
companies have a controlling shareholder as defined by a 30% threshold (see data). A minority
interests voting regime would be a fit-for-purpose policy that suits the nature of our local listed
market.
2. Improved perceptions by all shareholders that directors are working in the best interests of the
company, as required under the Companies Act.
3. Improved valuation metrics for listed companies with a controlling shareholder – these are often
subject to higher risk assessments by minority investors.

What does NZSA mean by a minority interest regime?
1. N Z S A’s proposal stipulates that where a company has 30% or more of its shares owned by a single
shareholder (or shareholders acting in concert), that shareholder (or shareholders) is/are unable to
vote on the election or re-election of independent directors.
2. We believe support for the introduction of such a regime to our public capital markets is growing
amongst investment professionals.

What are the benefits of a minority interests voting regime?
1. NZSA believes that in practical terms, a minority interests voting regime is likely to result in greater
collaboration between different shareholder groups to identify and nominate independent
directors consider appropriate by all shareholders.
2. Further, we believe that such a regime would improve the credibility of both independent and non-
independent directors.

NZSA letter to PGG Wrightson Shareholders Page 4
March 6
th
2024
Why does ‘independence’ matter?
NZSA believes there are three key objectives of maintaining director independence on a Board:
1. Independent judgement: Ensuring that directors are able to apply an unfettered mind to make
decisions that are in the best interests of the company.
2. Conflicts of interest: Conflicts between the interests of the company and individual directors
are identified and managed.
Conflicts between different shareholder interests, and the inherent risk that presents to
minority shareholder, are identified and mitigated. We believe this is a particularly important
factor in examining the relationships between PGG Wrightson and Agria.
3. Market confidence: Director independence instils confidence in investors.

Current Board and Management
NZSA is supportive of the skills and capabilities brought to PGW by three of the existing Independent
Directors: Garry Moore, Sarah Brown and Charlotte Severne.
We note that Agria is not proposing the removal of current Independent Director, Meng Foon. While we
recognise that it is the role of the Board to determine the independence status of directors, NZSA
considers this offers a signal as to his potential patronage by Agria. NZSA is therefore concerned as to
the degree of Mr. Foon’s independence. We understand that Meng Foon was originally nominated as a
Director by Agria.
NZSA is supportive of the Board’s actions on February 16
th
to elect Garry Moore, a Christchurch-based
Independent Director, as Chair.
We remain supportive of PGW’s long-term future and the capability of its staff.


Additional Resources
1. Announcement made by PGW February 13
th
, including the seven resolutions proposed by Agria
2. Announcement of February 16
th
detailing the appointment of Garry Moore as Chair
3. NZSA blog article (published the morning of Feb 16
th
)
4. 2018 OIO judgment and Settlement Agreement