Bernard Kavanagh, the WCB corporate development general manager, sold 400,666 shares last financial year, according to the company’s annual financial report to the stock exchange.

It is believed most of them were offloaded in the period between January and mid-March, when Murray Goulburn was either actively pursuing a merger or buying shares to build up a 10 per cent stake in the Allansford-based dairy company.

Mr Kavanagh’s parcel represented about one per cent of the company’s total shares but he still retains a substantial holding.

The co-operative paid up to $4.50 a share after an earlier formal offer of $4.35 was rejected by the WCB board.

Financial industry sources told The Standard it was unusual for a senior company executive and major shareholder to be allowed to sell during a takeover bid by a rival.

Company directors and senior executives were instructed not to buy or sell WCB shares during the takeover splurge unless they had approval from chairman Frank Davis.

Mr Davis told The Standard he was satisfied with Mr Kavanagh’s motives.

“It was entirely appropriate,” he said.

“It was not something we would normally approve.

“I was approached by Mr Kavanagh and I sought advice from the chairman of our audit committee.

“Mr Kavanagh had quite genuine personal reasons and (it was) not for his personal gain. He’s done everything appropriate.”

Mr Kavanagh declined to comment.

WCB last week posted an after-tax profit turnaround of $8.8 million following its $20 million loss the previous financial year and predicted more positive returns ahead.

Its financial report, posted on the Australian Stock Exchange website, lists the shareholdings of the board directors and six senior executives, as well as the previous financial year’s holdings.

It also reveals former chief executive Neil Kearney was paid a consultancy fee for the six months after his April 2009 resignation, $40,000 of which related to the 2010 financial year.

The company’s consultancy fees the previous financial year totalled $69,757.