Overseas Investment Office Ignored Cedenco Warning
Overseas Investment Office Ignored CAFCA’s Warning About Cedenco’s US Owner
“One of New Zealand's biggest vegetable processors, Cedenco failed under the weight of high debts and problems with its shareholding and "governance", with unspecified problems relating to its ultimate owners in the United States. The US-based Sayler family, which ultimately owns Cedenco, also owns a US company, SK Foods, which filed for bankruptcy protection this year. There is also an ongoing federal investigation into SK Foods, including bribery allegations” http://www.stuff.co.nz/business/industries/3046759/Cedenco-receivers-reassure-growers, 10/11/09.
The Overseas Investment Office can’t say that it wasn’t warned about the problems in the US arising from the bribery allegations. More than a year ago, when those bribery allegations first appeared in the NZ media, the Campaign Against Foreign Control of Aotearoa wrote to the OIO regarding whether the persons owning and operating Cedenco were of good character, as required by the Overseas Investment Act.
Our August 2008 letter is below, as is the reply we received from the OIO seven months later, in March 09, saying that it was satisfied that there was nothing to investigate. Yeah, right.
In light of this latest development, has the OIO undertaken any further investigation of the US owner of Cedenco?
This is another instance of the body charged with “oversight” of foreign investors turning a blind eye to anything that could be seen as an impediment to the relentless takeover of this country by transnational corporations. The OIO clearly sees its role as a rubberstamp, a facilitator of and advocate for those foreign investors, not an investigator or regulator. Things will only get worse when the Government further “liberalises” the Overseas Investment Act.
from CAFCA to OIO and OIO to CAFCA are
Campaign Against Foreign Control of Aotearoa
Dear Overseas Investment Office,
As you will be aware there have been several very recent NZ media reports that an FBI affidavit has been filed in a US court alleging that Frederick Scott Salyer, the founder and CEO of SK Foods, encouraged a named US broker, over a four year period, to offer bribes to food companies such as Kraft.
For instance see:
SK Foods owns 100% of Cedenco in this country
According to the Companies Office, Frederick Scott Salyer is a director of Cedenco and SK Foods International is still 100% shareholder. So there is little doubt Salyer has control of Cedenco as outlined in the Act.
We are fully aware that Mr Salyer is innocent until proved guilty.
Our question for the OIO is: what will you do if he is found guilty?
This strikes us as a bona fide case where the good character provisions of the Act would apply.
We look forward to your reply,
Thank you for your email of 28 August 2008 and for the information contained within it. Since receiving your information we have investigated your allegations and determined how best to proceed.
To the best of our knowledge, there have been no charges brought against either SK Foods or Mr Salyer - All charges to date have been brought against the broker (the payer of the bribes) and representatives of third parties (the recipients of the bribes). SK Foods and Salyer expressly deny any wrongdoing. We understand that investigations continue in the US.
With no charges having been brought against Salyer/SK Foods, there is nothing for the Overseas Investment Office to investigate at present. Accordingly, we are keeping a watching brief on the matter and will begin a formal investigation if and when charges are successfully brought against SK Foods or an individual with control of SK Foods.
An investigation would examine two issues:
1. Has Cedenco Foods complied with conditions of its 2004/2005/2006/2007 consents?
2. Has SK Foods complied with the conditions of its 2001/2003 consents?
It will have been a condition of each of those consents that the individuals with control of SK Foods remain of good character and not persons of a type listed in section 7(1) of the Immigration Act 1987. Any investigation would focus on whether these requirements remain satisfied.
I hope this address your questions. If not, please don't hesitate to contact me.
Pedro Morgan - Solicitor
Overseas Investment Office