|
Farmer Bros. Asked to Open Books
By CONOR DOUGHERTY
Staff Reporter
The largest institutional investor in Farmer Bros. Co. has demanded that the
company open its financial records to determine how it is managing its
investment funds.
The move by Franklin Mutual Advisers LLC comes a month after it asked the
Los Angeles-based coffee concern to split its operating division from its
investing activities.
Franklin Mutual, which controls 9.6 percent of Farmer Bros. outstanding
shares, has been involved in a years-long tussle with Farmer Bros. and its
board, which are notorious for shunning investors.
For the past few months, Franklin, a unit of San Mateo-based Franklin
Templeton Investments, with $270 billion in assets under management, has
been sponsoring a shareholder forum to determine ways to boost Farmer Bros.
stock.
At issue is Farmer Bros.’ pool of investment funds, which, as of the quarter
ended March 31 totaled $226.8 million, 56 percent of corporate assets.
Franklin believes the company has no certain plans for the money and wants
Farmer Bros. to register with the Securities and Exchange Commission as an
investment company.
An investment company designation would change how Farmer Bros. reports its
results and require the company to hire investment professionals to oversee
the funds.
To obtain the records, Franklin is taking advantage of a California law that
allows shareholders to demand and inspect company records on site and during
normal business hours. The demands were made in a July 26 letter to Roy F.
Farmer, Farmer Bros. 85-year-old chairman. A copy of the letter was attached
to a filing with the SEC.
Officials from Franklin were not available for comment. Farmer Bros. did not
return calls seeking comment.
Under California law, Franklin may send a team of lawyers and accountants to
Farmer Bros.’ Torrance headquarters. Farmer Bros., which has ignored
Franklin’s demands thus far, is not required to do more than open the door,
according to Gary Lutin, an investment banker who has been chairing the
ongoing forum for Farmer Bros. shareholders. He said Farmer Bros. had not
responded to the demand to open its books.
All contents of this site © 2002 CBJ Associates. All rights reserved.
|