Zespri sees SFO bill ballooning to $7.3 million

Wednesday 20th July 2016

Zespri International, the kiwifruit marketer, says its total bill for a Serious Fraud Office investigation has now risen to $6.8 million, with a further $500,000 set aside to cover costs in its 2015/16 accounts.

In its annual review published this morning, Zespri said it continued to cooperate fully with the inquiry, but "the SFO has declined to communicate the focus of its investigation." It believes it has satisfied the requirements of the document production notices served on it by the SFO, but it anticipates further work on the issue in the next financial year, the report said.

A Zespri spokesperson said the last contact they had from the SFO was in December 2015. A spokesperson for the Serious Fraud Office confirmed the inquiry was still ongoing.

The costs of the inquiry, which kicked off in October 2013, are being covered by Zespri's corporate body, rather than grower pools.

In an interview with the Bay of Plenty Times in June 2015, chief executive Lain Jager said the company had no knowledge of what the SFO was looking at but "we can surmise, as I think most people do, that their interest relates to the historic issues in China. But that is a surmise on our part."

In March 2013, Zespri's Chinese subsidiary, ZMMC, was fined almost $1 million and an employee was jailed for five years over the underpayment of customs duties on kiwifruit imports between 2008 and 2010.

Zespri's profits this year were bolstered from the board releasing a $13.9 million charge it had sitting on its balance sheet in case it was pursued for costs by the Chinese courts. The Kiwifruit marketing company booked a $13.9 million charge on its balance sheet in 2012 as a contingent liability but said in March all issues relating to its subsidiary in China have now been resolved with the Shanghai Court.

BusinessDesk.co.nz

Comments from our readers

No comments yet