The chair of Australia’s largest wheat exporter is facing serious allegations amid a bitter election campaign.
- Wally Newman is seeking re-election at CBH Group but is facing allegations of releasing misleading company information and acting inappropriately towards women
- A former board member was told that as a result of a 2018 investigation into Mr Newman’s behaviour he would retire at the end of this term
- The grain storage and export company is owned by about 4,200 WA grower shareholders and is Australia’s third-largest private company
Wally Newman, the chair of Cooperative Bulk Handling (CBH Group), is recontesting his seat on the board of a company which raked in about $4 billion in revenue last year.
He has been accused by an election competitor of releasing misleading company information about its Asian flour milling investment and using this information to win the election.
In other allegations, Mr Newman has been accused of acting inappropriately towards women and was subject of an internal 2018 investigation into his behaviour.
The grain storage and export company based in Western Australia is owned by about 4,200 WA grain grower shareholders and is Australia’s third-largest private company.
Challenger lodges complaint
CBH Group shareholders are in the process of electing three members to serve as directors.
Mr Newman, who has been on the CBH board for almost 20 years, is standing for election in District 4 of the CBH regions.
But a challenger in the contest, Lake Grace farmer Shane Carruthers, has lodged an official complaint about comments Mr Newman made on the campaign trail.
Mr Carruthers said he believed Mr Newman made potentially misleading statements about the financial situation of one of CBH’s foreign investments, Interflour Group Pty Ltd.
He also alleged Mr Newman used confidential board information to gain an electoral advantage.
CBH owns half of Interflour, which is made up of South-East Asian flour milling and brewing assets, along with Indonesian company Salim Group.
Asian investment under fire
In August last year, CBH Group revealed they were loaning Interflour $42.9 million interest free, which drew criticism from some grower members.
In the financial year to 30 September 2019, Interflour lost about $30 million — half of which was carried by CBH.
Last Friday in an interview with the ABC, Mr Newman defended the Interflour investment claiming it was “looking at probably turning over $30-60 million, as far as profit goes,” for the coming year.
Mr Carruthers said he believed Mr Newman’s statement was “very misleading to the growers and, [in] actual fact, incorrect”.
“For Wally to come out and say that Interflour will turn a profit of between $30 and 60 million this year, there is just absolutely no chance of that,” he said.
Mr Carruthers said he had spoken to several other CBH directors who said Interflour would struggle to make a profit this year.
The Lake Grace grower, who will find out on Monday if his CBH directorship campaign has been successful, also alleges Mr Newman used confidential board information in the election campaign.
The ABC approached Mr Newman for a comment, but he did not respond.
But CBH spokesman Todd Cardy said Mr Newman’s Interflour comments referred to earnings before interest, tax, depreciation and amortisation figure (EBITDA).
“EBITDA is a larger number than what people might interpret as profit,” CBH spokesman Todd Cardy said.
“To further clarify, this was a forecast range for the full financial year based on the recent performance of Interflour. But it is not a certain outcome given the intense competition in flour milling.”
Allegations chair used confidential information to win votes
The Interflour profit projection is not something normally made public by CBH prior to the release of its annual report.
In Shane Carruthers’ view, it is not a good look.
“He’s disseminating information for his own benefit,” Mr Carruthers said, “to benefit himself in election.”
It is unclear whether Mr Newman’s comments would be in breach of the Corporations Act.
CBH did not respond to questions about whether the figures released by Mr Newman were confidential and whether he had permission to release them.
Mr Carruthers has made a formal complaint to the WA Electoral Commission (WAEC) which is running the CBH board election.
In a statement, the WAEC said it does not comment on or verify whether a specific complaint has been received during the course of any election it is running.
“To do so can, in itself, potentially impact the conduct or outcome of an election,” the statement said.
Counselled over comments about women
In another development, a former CBH board member called for Mr Newman to quit over a 2018 investigation into his inappropriate behaviour toward several women.
John Hassell, who served on the CBH board for 10 years until February 2018, wrote to all CBH board members in December last year about an internal 2018 CBH investigation.
The investigation was triggered after Mr Hassell made a complaint via the company’s whistleblower process about remarks Mr Newman made about a young woman at a grains conference in August 2017.
In the complaint, Mr Hassell claims Mr Newman called the women in her mid 20s a “pretty young thing” and said she was wearing “come f**k me boots.”
Mr Hassell said the comments, which were made amongst a group of CBH directors, staff, and other industry people, made him furious and he told Mr Newman at the time the comments were out of line.
“If Wally Newman said that to my daughters in front of me I would have punched his lights outs,” Mr Hassell said.
The complaint also claimed Mr Newman made derogatory comments about two female board candidates during the 2018 CBH board election campaign.
One of those women, Natalie Browning, now serves on the CBH board with Mr Newman.
Re-election bid ‘pretty bloody disappointing’
Mr Hassell says he was told as a result of the investigation Mr Newman would retire at the end of his term and be counselled on his behaviour.
“One of the outcomes was an agreement from Wally that he would see his term out then retire gracefully,” said Mr Hassell’s letter to the board, dated December 23 last year.
Mr Hassel said he was motivated to write the letter when he found out Mr Newman was standing for re-election.
“When I saw Wally had nominated for the board that’s when I though ‘this man is not being held to account’. That’s why I wrote the letter,” he said.
“If you let the people at the top of the tree go unpunished then that sets the standard for everyone.
“And that is pretty bloody disappointing.”
A CBH board member, who did not wished to be named, confirmed the board saw the 2018 internal investigation report which found Mr Newman had acted inappropriately.
As a result, Mr Newman was told to take counselling, but the current board member refused to say if the chairman agreed to retire at the end of his term.
The ABC made numerous attempts to contact Mr Newman to comment on the allegations.
In a company response, a CBH spokesman said “CBH Group directors and employees are expected to adhere to the highest standards in their professional behaviour and are held accountable at all times”.
“All complaints in relation to alleged inappropriate conduct are treated seriously and fully investigated,” the spokesman said.
“CBH respects the right to privacy of anyone lodging a complaint and does not comment on individual cases.”
The ABC contacted the young woman at the centre of the August 2017 comments. She did not wish to comment or be identified.
She did say she did not hear Mr Newman’s comment at the time and was not contacted as part of the 2018 investigation.
But she said Mr Newman had called her on Christmas Eve last year, one day after Mr Hassell emailed his letter to the board.
Results in the 2020 CBH board election will be announced on Monday February 17, with the company’s AGM three days later.