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ADM Management Secure After Unruly Annual Meeting

October 20, 1995

DECATUR, Ill. (AP) _ Dwayne Andreas still has a sturdy grip on Archer Daniels Midland Co., despite shareholder discontent about a federal price-fixing probe and rumblings about his influence over the board.

At the company’s annual meeting Thursday, several shareholders showed their displeasure by voting against Andreas and the 17-member board _ which mostly includes his friends and ADM executives, and three relatives.

But Andreas _ ADM’s chairman and chief executive _ and the other directors were re-elected, even though the votes against them were higher than normal. The were relected by about 80 percent of the shareholders, not the customary 95 percent or more.

At the unruly shareholder’s meeting punctuated with outbursts from a handful of disgruntled investors, embattled company executives dodged hostile questions and Andreas belittled some shareholders to the delight of others.

``This is telling us a lot about how this board runs this company,″ Ed Durkin of the Carpenters union, which holds 770,000 shares, said after Andreas ignored his shouted questions.

Andreas shot back ``This meeting, sir, runs according to my rules.″

The biggest cloud over the company is a federal investigation into allegations ADM schemed with competitors to fix prices on some of its hottest products: high-fructose corn syrup, citric acid and lysine, a livestock feed additive.

Andreas and other executives skirted the issue of the federal inquiry. They said little about the investigation and a lot about Mark Whitacre, the fired head of ADM’s BioProducts Division who secretly taped executives’ conversations for the FBI.

Andreas told the meeting that he was ``personally outraged″ at the conduct of some individuals at the company, an apparent reference to Whitacre. Andreas also alleged Whitacre forged company President James Randall’s signature to embezzle $9 million.

Whitacre, reached at his Chicago-area office, declined to comment on the meeting Thursday.

ADM officials said the company has taken legal action against Whitacre in Switzerland, seeking $6.25 million in alleged stolen company money plus interest. Rick Reising, ADM’s general counsel, said more than $4 million has been frozen in Swiss accounts linked to Whitacre.

Whitacre has said the money in Swiss accounts was from secret payments ADM routinely made to its executives. Andreas and other company officials say their independent auditors have found no evidence of such improper payments.

``I want to report to you today that this investigation, which is continuing, has thus far found no evidence whatsoever that the company made any improper compensation or other payments to any employee,″ said Board member Brian Mulroney, a former Canadian prime minister heading a special committee investigating the allegations against the company.

Mulroney also denied Whitacre’s accusations of secret payments and said a federal grand jury in central Illinois is investigating whether Whitacre stole from the company.

Another fired executive, however, has said ADM’s president knew and approved of an under-the-table payment. The former head of the company’s Mexican operations, Reinhard M. Richter, said Randall approved a $190,000 signing bonus made by phony invoices.

Andreas also managed to sidestep concerns from some investors that he has too much control of the company. His brother, son and nephew are all directors, and most other directors are either ADM executives or Andreas’ friends.

Company officials said they had created a committee of directors to study the issue of whether the board is independent enough.

The United Methodist Church offered a resolution calling for more women and nonwhites on the company’s board of directors; the measure was defeated 3-1 by shareholders.

``How can you, as an American company, have 17 all-white directors? That’s criminal, and it’s not fair,″ said retired Methodist minister Douglas Moore of Washington, D.C. Many in the crowd booed Moore’s remarks, and Andreas later tried to prevent Moore from asking further questions.

Also Thursday, Andreas said the company had more than doubled its quarterly dividend, to 5 cents from 2.38 cents, and would buy back 25 million shares of its outstanding common stock. ADM reported Monday that earnings for the three months ending Sept. 30 rose 5.6 percent to $163.1 million, but did not elaborate on the results. Analysts said the earnings were not as robust as previously expected.

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