Former Synlait CEO John Penno Challenges Voting Rights in Crucial Shareholders’ Meeting

Penno's challenge is rooted in the NZX listing rules and the takeovers code, asserting that these major shareholders, who are collectively injecting $217 million into Synlait, should not be allowed to vote on the resolutions. Should his complaint be upheld, only the remaining shareholders, excluding Bright and a2MC, would be able to participate in the voting process.

As a 2.3% shareholder and former leader within the company until May 2024, Penno’s complaint has garnered significant attention. In response, Synlait issued a statement via NZX, firmly disagreeing with Penno’s assertions. The company maintains that it has fully complied with all relevant NZX listing rules and the takeovers code.

Synlait emphasized the critical nature of the upcoming shareholders’ meeting, stating, "The special shareholders’ meeting is a critical step for the future of the company. If the resolutions are not approved and the recapitalization is not implemented, Synlait would likely need to cease trading and initiate a formal insolvency process unless further support from existing banks is secured."

The company’s independent chair, George Adams, underscored the thoroughness of the board's approach since his appointment in May, expressing confidence in the proposed offer structure. Synlait is actively engaging with regulators to resolve the complaint ahead of the shareholders’ meeting, which remains set to proceed as planned.

The meeting, announced on August 20 after receiving external advice and approval, will ask shareholders to vote on resolutions concerning the proposed recapitalization. This includes the issuance of $185 million in shares to Bright Dairy Holding Limited and $32.8 million in shares to The a2 Milk Company, as well as the settlement with a2MC and A2 Infant Nutrition Limited. Despite the complaint, Synlait has confirmed that the voting and the timing of the meeting will not be affected.