Former bosses defend actions over DFoB collapse

Three former bosses have defended their actions prior to the collapse of Dairy Farmers of Britain.

The three men appeared before a committee of MPs on Wednesday (6 January).

Former DFoB chairman Rob Knight, former board member Philip Moody and former chief executive Andrew Cooksey all gave evidence.

The House of Commons Environment, Food and Rural Affairs Committee is investigating the failure of DFoB last year.

Hundreds of dairy farmers lost thousands of pounds when DFoB went into receivership last year.

Committee chairman Michael Jack led the questioning.

Former DFoB chairman Rob Knight was asked why the posts of company chairman and chief executive had at one point been combined into a single role.

“It was absolutely at the board’s request,” he said.

Mr Knight served for about a year during 2005/6 as the company’s executive chairman, acknowledging that he received about £400,000 for doing so.

He conceded that his remuneration package had been a “sticky point” and the source of lots of commentary.

“The straightforward and honest answer to the question is that I was appointed from the outset on a daily rate,” he said.

“That daily rate was subject to remuneration approval, was subject to board approval and was ultimately subject to council approval.”

Mr Knight said he had negotiated the daily rate but then ended up working full-time.

Former board member Philip Moody was grilled at length by the committee.

He was asked to explain his relationship with Smith and Williamson, a company that provided financial advice to DFoB.

Mr Moody, who had worked with farmer-controlled businesses for 30 years, told the committee he was head of corporate finance at Smith and Williamson.

He confirmed he had been approached by Mr Knight in 2003 to provide DFoB with corporate finance skills as it pursued the acquisition of other dairy companies.

Mr Moody denied there was a conflict of interest between his role as a DFoB director and a director of Smith and Williamson.

“All of the services delivered by Smith and Williamson [to DFoB] were headed up by someone other than me,” he said.

Mr Moody acknowledged that with hindsight DFoB had paid too when it acquired Associated Co-operative Creameries (ACC) from the Co-op.

But he insisted that all due diligence processes had been properly carried out prior to the purchase of ACC in 2004.

Former DFoB chief executive Andrew Cooksey said all DFoB’s budgets had been scrutinised by and approved by its board of directors.

The investigation continues.