A Shanghai Court has found Zespri’s China-based subsidiary, and one of its employees, guilty of being an accessory to the under-declaration of customs duties by Zespri’s former-independent importers between 2008 and 2010.
In its judgment, reported to Zespri today (22 March), the court ruled that Zespri Management Consulting Company (ZMCC) was convicted of the crime of smuggling general cargo and was sentenced to a fine of RMB5m (NZ$960,000).
The ZMCC employee was found guilty of being an accessory to the crime of smuggling general cargo. The judge said he had played a “minor role” in the offending and was therefore given a “light-sentence according to the law” of five years’ imprisonment.
The court also ruled that “illegal gains” from the crime should be repaid. It appears the court is referring to the amount of money paid by the former importer to ZMCC for marketing services, which were offset against the importer’s fruit account. Under this ruling, the illegal gains could amount to around NZ$10m.
Zespri pleaded not guilty to the charges at a court appearance on 17 January, on the basis that the legal obligation to meet all customs requirements sat with its former importer and that it had no intent to facilitate or engage in the evasion of customs duties.
Commenting on the court's verdict, Zespri CEO Lain Jager said Zespri's first concern was for the welfare of its employee, and that Zespri was also considering whether to appeal the decision.
‘‘Obviously we are very disappointed at the verdict. Regardless of today’s verdict or the outcome of any possible appeal, Zespri remains committed to China in the future,” he said.
‘‘It is important to note Zespri has successfully operated new export practices and worked with new import partners over the 2011 and 2012 seasons.’’
Zespri pleaded not guilty to the charges in January on the basis that the legal obligation to meet all customs requirements sat with its former importer.
New Zealand grower association NZ Kiwifruit Growers Incorporated told news website www.stuff.co.nz it had launched an independent investigation into Zespri focusing on the circumstances that gave rise to the Chinese prosecutions and the effects they will have on the Zespri brand and continued trade with China.
NZ Kiwifruit Growers Incorporated CEO Mike Chapman said: “Growers need to have full confidence in Zespri’s activities and we need to ensure that where improvements within Zespri can be made, they are made.”
