19 May 2013

Kiwifruit double invoices defended by Zespri

10:05 pm on 19 May 2013

Zespri is defending its financial dealings in China where one of its importers is under arrest and charged with smuggling after undervaluing its kiwifruit in a double invoicing scheme.

A Zespri spokesperson said the company accepts the double invoicing happened, but said the company thought it was legal.

In a document provided to Radio New Zealand, Zespri said it has been helping customs officials in China with their investigation of a 'Mr Liu', one of their importers who pleaded guilty to the charge last year.

He was sentenced to prison for 13 years and ordered to repay the amount of underpaid customs duties, about $NZ7 million.

The invoicing system meant an accurate tax invoice was sent by Zespri to China, but a second pro-forma (standard) document, was also issued at the same time with the kiwifruit valued at a much lower price.

Zespri said Mr Liu told customs officials in China the pro-forma invoices were the total amount owing to Zespri.

Zespri paid its Chinese importers lump sums from foreign bank accounts to make up the difference.

The company said it has updated the New Zealand Government regularly on the investigations.

Zespri blames importers

Zespri blames its importers for the creation of the system and says they misled the company. Zespri thought the system was legal.

After Mr Liu and two other importers were appointed, the market grew from 3.5 million trays in 2007 to 10 million in 2011.

Zespri says China did not raise the issue until mid-2011.

ACT renews calls for inquiry

The ACT party is renewing its call for an inquiry into Zespri.

At the time of Mr Liu's plea, the ACT party called for an inquiry into the issue.

A party spokesperson says the new evidence shows Zespri had full knowledge of the scam, and tried to sweep it under the carpet.