Dairy co-op board narrowly survives heave attempt

THE underfire board of west Cork’s largest dairy co-op has narrowly survived a heave attempt by shareholders.

Drinagh Co-Op’s 41-strong committee of management, headed by chief executive Joe O’Sullivan, will remain at the helm despite a 60% to 40% vote by about 800 shareholders in favour of removing them.

The shareholders called an extraordinary general meeting, which was held in Bantry on Wednesday night, in an attempt to remove the board and its chief executive of 20 years.

A two-thirds majority had been required.

Speaking yesterday in the wake of the vote, the co-op chairman announced plans for sweeping changes.

Michael John O’Donovan said the management had “taken cognisance” of the result of the vote.

“The shareholders have expressed dissatisfaction with the current committee structure,” he said.

“I am committed to putting proposals before shareholders to reduce the committee size as soon as possible.”

It is not clear what those proposals will be but the size of the board will be reduced significantly.

The co-op, which employs about 200 people, represents close to 1,000 dairy farmers across west Cork.

But following a series of controversies and a failed attempt earlier this year to remove the board, shareholders called the extraordinary general meeting.

About 800 people attended and they voiced a number of concerns regarding the management of the co-op.

Among their main concerns was a tax bill arising out of the tax treatment of certain payments to senior employees.

It is understood about 20 staff members could have been in receipt of payments which were not taxed properly.

The co-op contacted Revenue when it came to the management’s attention the tax treatment of these payments may have been irregular under current tax law.

Negotiations with the Revenue followed in an effort to settle the arrears which it is understood stretch back to seven years and also included penalties.

The co-op confirmed yesterday those negotiations have concluded.

Although rumours were circulated the co-op was negotiating to pay a €3 million tax bill, it is understood the final settlement was in the region of about €800,000.

In 2004, Drinagh Co-Op had a turnover of €72m and shareholders’ funds of €52m. It owns the food production plant Carbery Milk Products along with three other west Cork co-ops, Barryroe, Lisavaird and Bandon.