22 Oct 2013

SFO investigating Zespri

10:10 pm on 22 October 2013

An investigation by the Serious Fraud Office into Zespri is clouded in mystery, with the SFO refusing to say why it is investigating, and the kiwifruit exporter claiming it has no idea.

Zespri says it has not been contacted by the SFO and has no details of the scope or substance of any investigation. However, it does say that it will co-operate.

Earlier this year, Zespri was convicted and fined nearly $1 million in China for its role in a scam involving the underpayment of border duties in China between 2008 and 2010.

At the time, the Zespri chief executive Lain Jager admitted that there was corruption and fraud involved in the case but it wasn't Zespri.

The national body Kiwifruit Growers Incorporated is still carrying out its own investigation into what happened in China. President Neil Trebilco says to link the SFO investigation with Zespri's operations in China is only speculation at this stage.

"I am a little that the Serious Fraud Office is taking an interest. But I guess what we don't know is the nature of that interest just yet and why they're doing it. I guess we'll just have to wait and see what that is."

In a recent OECD report, which was critical of New Zealand's efforts to implement a convention on anti-bribery cases, it also mentioned that the SFO had opened an investigation in July this year into possible foreign bribery by a New Zealand company in an Asian country to try and secure access to markets.

Mr Trebilco says that can't be connected to the Zespri case in China, because it wasn't about market access.

Rival group the Independent Kiwifruit Growers Association which opposes Zespri's export monopoly - which has everywhere bar Australia - isn't surprised by the SFO investigation.

Spokesperson Ross Hart has been calling for an independent investigation into Zespri's business practices and says he's delighted that the SFO is looking at the marketer.

"As a group, we've been calling for an investigation for quite some time due to information that we've received over a number of years as to how Zespri is behaving - specifically offshore."

Mr Hart says his group has no trust in the Kiwifruit Growers Association, which is meant to monitor what Zespri does.

Primary Industries Minister Nathan Guy said on Tuesday he is aware that the SFO is looking into Zespri, but has no more details.

"That's something for SFO to consider. They've got to work through the terms of reference as I understand it and work through the process."