Anger as Kerry Co-op members fear tax hit from PLC share sale plans
A row between shareholders in Kerry Co-op is escalating as the Kerry Group share price broke through the €100 barrier for the first time this month to value the company at almost €18bn.
Shares in the company are up almost 20pc since the start of the year on the back of volume growth across each of the regions it operates in, with particularly strong growth of 9.3pc coming from the Asia, Pacific, Middle East, and Africa region, which was led by China.
In its latest trading update the company said it made a "solid" start to 2019, with reported revenue up 10.3pc in the three months to 31 March.
However, there were angry scenes at a meeting of Kerry Co-op shareholders in Limerick on Monday night with frustration over a proposed cash-for-shares scheme boiling over and calls for the Co-op, a shareholder in Kerry Group, to be wound down.
Serious differences have emerged between the Co-op board and a significant number of members, some represented by the Kerry Co-op Shareholders Alliance.
Alliance members want to sell the Co-op's remaining 13.7pc stake in Kerry Group, and share out the proceeds, worth on average around €165,000.
Meanwhile, the Co-op board has approved and recommended an equity redemption scheme for members which would offer members an opportunity to sell some or all of their shares.
Members can avail of the offer until June 5 but the scheme will have to be approved at Kerry Co-op's upcoming AGM on June 19.
Alliance members oppose the board's cash-for-shares proposal as, they say, it could result in a higher tax bill.
On Monday night more than 400 shareholders attended a meeting at the Southcourt hotel in Limerick to discuss the impasse. The meeting was jointly organised by Listowel farmer Dave Scannell who told The Kerryman newspaper that if the cash-for-shares scheme comes in the inheritance tax valuation would double from €300 to approximately €600.
According to Mr Scannell and the Alliance anyone who takes part in the scheme would face income tax, PRSI and USC of up to 55pc with no allowances made for inheritance tax already paid.
At the meeting several shareholders called for the Co-op to be wound down.