The Independent Kiwifruit Growers Association is calling for Zespri board chairman John Loughlin's resignation following allegations of proxy vote information abuse.

IKGA chairman Marcus Wilkins is calling for an independent inquiry into the repeated misuse of confidential shareholder proxy votes before Zespri's annual general meetings.

Zespri chairman John Loughlin says issues over proxy vote information abuse are in the past.

'It's clear from the reported breaches of shareholder confidentiality and the company's attempts to cover up the extent of these breaches that an independent inquiry is the only way for Zespri shareholders to regain confidence in the Zespri board,” says Marcus.

'Sound democratic processes and robust corporate governance go to the heart of shareholder confidence in any company.”

His comments come after the National Business Review published a ‘damning report' by Barrister David Connor into the accessing of proxy votes, which was never disclosed to kiwifruit growers or Zespri shareholders.

'It would appear from this report that the re-election of Zespri International chairman Craig Greenlees at successive AGMs is seriously called into question,” says Marcus.

'Even if he did have the votes to regain his seat on the board, he should have resigned because, according to the article, he received confidential shareholder proxy vote information prior to the AGMs in 2005, 2006 and 2008 in breach of a confidentiality agreement that he negotiated.”

When SunLive contacted Craig Greenlees, he said he had not seen the IKGA newsletter.

'This matter is being dealt with by the by the Zespri board and chairman, I suggest you talk to the chairman John Loughlin.”

Through Zespri communications advisor David Courtney, John Loughlin says it is an old issue, it happened three years ago and it was dealt with at the time.

Zespri has taken steps to ensure it won't happen again, and Zespri has independent confirmation by statutory declaration that this matter has not occurred since 2008.

'John Loughlin refused to agree to an independent inquiry on this matter when IKGA raised the issue at the last AGM,” says Marcus.

'His continuing role as chairman must now be in doubt, given his role in keeping these matters from shareholders and attempting to justify the reason Mr Greenlees was not immediately forced to resign.”

Justifications that Mr Greenless is a ‘key board member' and a ‘strong contributor' carry the unpleasant whiff of an old-boys club where director interests are put above those of shareholders and growers, says Marcus.

'Even more extraordinary is Mr Loughlin's apparent justification for his failure to act decisively on what is a clear cut breach of trust and confidence by stating that the board needs to keep its focus on grower returns.

'Election to the board of Zespri is a political process and not a commercial one.

'Directors like Mr Greenlees are politicians who need grower support for their re-election, which is why the integrity of the voting system is of great interest to growers.”

John Loughlin was, however, correct to point out the need for a clear focus on grower returns, says Marcus.

Mistakes by the Zespri board affect the whole industry, including those growers disenfranchised by growers holding shares in excess of their production.

'We believe as many as 30 per cent of growers are not shareholders and an unknown, but significant number hold fewer shares than their production.

'Given the fact that all kiwifruit growers, and not just Zespri shareholders, have to supply a company with monopoly powers conferred on it by the government, these revelations are even more serious.

Marcus says John Loughlin attempted to shut down debate on the issue at the last AGM and he says this raises further questions about what appears to be a cover-up of just how serious and widespread this has been and underlines the need for an independent inquiry.

IKGA is calling for an immediate independent inquiry with the results to be made public.

It wants the damning independent ‘Connor' report paid for by Zespri with grower funds to be made public.

It is also calling for NZKGI to make available to growers all information that NZKGI had on the accessing of proxy votes in breach of the confidentiality agreement including the full content of the legal opinion that NZKGI obtained on this matter.