Zespri must answer to growers, says ex-Satara boss

04:36, Jul 19 2013

Zespri's handling of its conviction for smuggling in China is "not bloody good enough", says a businessman challenging a seat on the board of the kiwifruit export marketer.

Tom Wilson is a former KPMG partner and former chief executive of kiwifruit company Satara.

Zespri's directors and management must answer to growers for a slump in profits and share value resulting from the conviction, he said.

He had been persuaded to stand by growers anxious about the standard of commercial accountability within Zespri, Wilson said.

He said he had not spoken out about the China issue until this week when Zespri lost its appeal against the smuggling charges.

A Shanghai court this week upheld the charges against Zespri's Chinese subsidiary and one of its employees.


Chief executive Lain Jager has said the decision is disappointing and the focus is now on the wellbeing of the convicted employee.

Zespri spokesman David Courtney said it would be "improper" for the company to respond to Wilson's claims less than a week from director elections.

"The company cannot be seen to be interfering in that process."

Shareholders would form their own views on the claims at meetings with candidates, he said.

Nor could Zespri comment on the China issue because the legal process was still under way for the company's employee there, Courtney said.

In May, Fairfax Media reported Zespri had admitted that in 2008 it was warned a dual invoicing system in China could lead to the arrest of its employees and cause reputation risk for New Zealand.

It was also reported that Zespri would issue two invoices for kiwifruit shipments - one for the true value of the fruit and a second for a lower amount that was used for customs purposes.

The warning came from New Zealand Customs and Ministry of Foreign Affairs and Trade officials, who raised "serious concerns" that Zespri's importers in China were evading customs duty.

Mt Maunganui-based Zespri said it had checked with customs officials at a port in southern China and was assured everything was all right.

For Zespri growers the China incident is a double whammy, coming on the heels of the devastating outbreak of virulent Psa disease which is now in 75 per cent of the country's kiwifruit orchards.

Wilson, who is standing for election against industry-elected director and current vice chairman Bruce Cameron, claims the China conviction has cost Zespri 60 per cent of its profit and led to a 33 per cent dip in share value.

The board and management were "whitewashing" the conviction, he said.

"That's not bloody good enough. Growers will be expecting accountability from directors and management for this loss."

While he does not support calls for a government inquiry around the China incident, Wilson notes growers not satisfied with Zespri leaders' standard of accountability around the conviction have other avenues.

"If growers are not satisfied this issue is tidied up in a commercial and transparent manner they can approach the Financial Markets Authority or complain to the Serious Fraud Office."

Wilson is calling for "clear commercial accountability" within Zespri, which has the statutory right to market and export New Zealand growers' kiwifruit.

He said he is a strong supporter of the single-desk kiwifruit export system and if growers lost the single desk it would be "a commercial disaster".

However, he said it is kiwifruit growers who have the single-desk export right, not the Zespri structure, which is simply a vehicle for exercising that right and can be challenged.

Another industry-elected director, chairman Peter McBride, is being challenged in this year's election by Robert Knyvett.

Former Fonterra chief financial officer Jonathan Mason recently joined the board as one of its three independent directors.

Election results will be announced at Zespri's annual meeting in Tauranga on Wednesday.