Dairy giant Fonterra fined for keeping investors in dark over botulism scare
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E-mail Xinhua, June 13, 2014
New Zealand's sharemarket regulator has fined dairy giant Fonterra 150,000 NZ dollars (130, 028 U.S. dollars) plus costs for failing to inform investors immediately of the botulism scare in August last year.
Fonterra Co-operative Group Ltd. issued a statement Friday saying it had reached "a settlement" with the NZX stock exchange regarding the breaches of rules around the continuous disclosure of information during the whey protein concentrate (WPC80) global recall.
Group director governance and legal Mike Cronin said Fonterra had cooperated fully with the NZX and the New Zealand Markets Disciplinary Tribunal throughout the investigation.
"Following the Fonterra board's independent inquiry into WPC80, and as the tribunal's statement sets out, Fonterra has made significant changes to ensure improved identification, management and escalation of emerging risks across the cooperative, with a particular focus on food safety and quality," Cronin said in the statement.
The fine was the largest-ever settlement to the stock exchange for breaking sharemarket rules, Radio New Zealand reported.
An investigation by the New Zealand Markets Disciplinary Tribunal found Fonterra took two and a half days to tell investors it believed some of its products were contaminated with a botulism- causing toxin, said the report.
The tribunal found Fonterra first knew about the positive test on July 31 last year, but told investors just before midnight on Aug. 2.
Last month, ministers announced a government inquiry into how the potentially contaminated dairy products were exported abroad would be completed by the end of November.
Fonterra pleaded guilty in a New Zealand court in April to four food safety-related charges connected to global recall of whey protein concentrate over the false botulism scare.
Fonterra is also fighting a civil case brought by French food giant Danone, which is claiming compensation of 350 million euros (474.36 million U.S. dollars) for the scare. Endi
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