June 16, 2014

 

Fonterra fined for failing to inform investors of 2013 botulism scare

 

Fonterra has been fined US$130,000 by New Zealand's share market regulator for failing to inform investors immediately of a botulism scare in August 2013.

 

Fonterra Co-operative Group Ltd. issued a statement, 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.

 

The Group director of governance and legal, Mike Cronin, said that 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.

 

The fine was the largest-ever settlement to the stock exchange for breaking share market rules, Radio New Zealand reported.

 

An investigation by the New Zealand Markets Disciplinary Tribunal found Fonterra took two and a half days to inform investors of products believed to be 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 August 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 US$474.36 million for the scare.