CORRECT: Serious Fraud Office ends four-year Zespri investigation with no charges
(Fixes length of investigation in headline and lede paragraph, adds timing in 4th paragraph)
By Paul McBeth
Nov. 7 (BusinessDesk) - The Serious Fraud Office won't files charges against Zespri Group over dual-invoicing, ending a four-year investigation into the legislated fruit export monopoly.
Director Julie Read said the white-collar crime investigator found the evidence didn't meet a high enough standard to lay charges after investigating allegations Zespri facilitated tax evasion while exporting kiwifruit to China by providing false invoices to its importer to use in declarations to Chinese officials.
"In this case the practice of dual invoicing facilitated criminal offending in China. The lower valued invoice was used by Zespri’s importer to evade duty and resulted in him being convicted for the Chinese offence of smuggling," Read said in a statement. "The instrument of that offending was created by Zespri in New Zealand. For that reason the matter properly came to the attention of the SFO."
In 2013, a Zespri subsidiary was found guilty of being an accessory to under-declaring customs duties by a Chinese court, which fined the unit $960,000, sentenced its employee to five years imprisonment, and ruled gains of some $11.6 million should be repaid. At the time, chief executive Lain Jager said corruption and fraud didn't involve Zespri. There were "things we could have done better, but we're not corrupt".
Read said New Zealand exporters should approach the practice of dual invoicing with "extreme caution" because it's a warning flag that duty is being evaded.
She acknowledged the case took a long time, saying there were "complex and unusual arrangements between Zespri and their Chinese importers".