The board of Kerry Co-op has written to shareholders alleging there was significant misinformation spread at the society’s recent AGM.
In the letter, chairman Mundy Hayes said the alleged misinformation relates to the tax situation relating to share exchanges or spin-outs.
Kerry Co-op is the largest shareholder in Kerry Group plc with a 13.7 per cent stake worth an estimated 2.2 billion euro.
The Kerry Co-op board is looking at the possibility of taking a more active role in milk processing.
However, there are shareholders who disagree with this and want the society to spin-out its stake in Kerry Group plc.
There are over 13,000 shareholders, but not all have voting rights.
Kerry Co-op’s letter to shareholders included correspondence from consultants Deloitte on the tax implications of a future spin-out of Kerry Group shares.
In Deloitte’s view, relief under section 701 of the Tax Consolidation Act would not apply due to the increase in non-farmer members and this opinion’s also based on discussions with Revenue. Shareholders would also likely be subjected to income tax, PRSI and USC.
To qualify for this relief, Kerry Co-op would have to be considered an agricultural society; to meet this definition under the Tax Consolidation Act, a majority of members would be mainly employed in husbandry and a majority would derive the main part of their income from husbandry.
Deloitte says the co-op could consider reducing the number of non-farming shareholders to help it qualify for the tax relief.
It says given the complexity of the situation, it anticipates not being in a position to advise what is feasible until the end of this year.