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Cattle exporter Wellard clashes with Butt

AAP logoAAP 11/11/2016 Trevor Chappell

Australia's largest cattle exporter, Wellard, has moved to stave off efforts by disgruntled major shareholder Butt Nominees to get a representative on its board.

Butt Nominees, which holds a stake of 14.4 per cent in Wellard, is dissatisfied with Wellard's financial performance and decline in its share price.

Butt intends to vote against Wellard's remuneration report at the cattle group's annual general meeting in Perth on November 29, and wants its nominee, Butt director Tyron Dennison, appointed as a director.

But the Wellard board says Mr Dennison has no prior experience as a director of an ASX-listed company.

"The board stands by its decision to make no recommendation on the resolution to appoint Mr Dennison and to vote undirected proxies against Mr Dennison's appointment," Wellard said in a statement.

It also said the controlling shareholder of Butt Nominees, Tariq Butt, had interests in livestock trading operations in competiton with Wellard.

If Mr Dennison were appointed to the board he would have access to commercially-sensitive information.

"In the board's opinion, it may present difficulties to have a director of a direct competitor on the Wellard board," Wellard said.

In a letter to other shareholders, Butt Nominees highlighted an 80 per cent fall in Wellard's share price since it listed on the share market in December 2015.

"We believe that this decline has resulted from a failure to ensure that the company is appropriately structured and capitalised to weather the volatility that inevitably comes with international livestock trading," Butt Nominees said.

Mr Dennison would bring a different perspective to the Wellard board's deliberation of critical issues, which would ensure that management was challenged appropriately, it said.

"This can only be to the long-term benefit of the company and its shareholders," Butt said.

Wellard made a loss of $23.3 million in the 2015/16 financial year, after forecasting a profit of $9 million in its prospectus.

Wellard shares were steady at 22.5 cents at 1245 AEDT.

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