Kerry Alliance demanding full liquidation of their shares
Kerry Co-op Shareholders Alliance are to set call for the full liquidation of their shares at a shareholder meeting tonight in opposition to the recent cash for shares scheme proposed by the co-op.
Alliance members want to sell their remaining 13.7pc stake (€2.2bn) in Kerry Group Plc and share the dividends, worth on average around €165,000, among co-op shareholders.
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Kerry Co-op recently sent its members an information pack about a voluntary cash for shares scheme which gives shareholders the opportunities to sell some or all of their shares. Members were able to apply for the scheme from yesterday until June 5 but the scheme will have to be approved at Kerry Co-op's AGM on June 19.
Members of the Kerry Co-op Shareholders Alliance said that the proposed scheme is the "least tax efficient" as shareholders who opted for the scheme would have to pay 55pc income tax rather than Capital Gains Tax.
"Those who inherit shares would be liable to huge levels of tax under the scheme. We want full liquidation of our shares," said Listowel dairy farmer David Scannell.
"Kerry Co-op hasn't traded in over 30 years. It doesn't serve a purpose. We want full access to our money to be able to set up a new co-operative entity that serves dairy farmers".
Head of the alliance, Donal Counihan, added that while the cash for shares scheme isn't on the agenda of the meeting in Tralee , the alliance will be calling for a full liquidation of shares at it.
Kerry Co-op chairman Mundy Hayes acknowledged that the scheme won't suit everyone.
But he said it is the "first step" in getting equity to shareholders and getting the co-op on track to meet the requirements of section 701 of the Tax Consolidation Act, which provides tax relief for agricultural co-op members - but since a high proportion of Kerry Co-op shareholders are not actively farming this is not available to them
"We acknowledge that this isn't the perfect scenario but we can't fully liquidate the shares as they are locked in and we have been advised that the proposed scheme is the most appropriate road to go down to get back in line with Section 701 and get equity to shareholders," said Mr Hayes.
"We are very anxious to get equity back to shareholders. It is a totally voluntary scheme and we would advise all shareholders to get tax advice before they make any decision."
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