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Cedenco Owes $49.3m - Receivers

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Feb 11 NZPA - Trans-Tasman food ingredients manufacturer Cedenco owes about $46 million to the ANZ National Bank and unsecured creditors are owed another $3.4m, receivers say.

Workers at Cedenco Foods have a preferential claim for $641,000 and the Inland Revenue Department is yet to confirm the amount of its preferential claim.

One of the joint receivers, Brendon Gibson, of KordaMentha, said today that he was unable to comment on the likely return to ordinary unsecured creditors "due to this information being commercially sensitive".

Mr Gibson has said the company continues to trade with the help of ANZ funding pending a possible sale. ANZ appointed KordaMentha as Cedenco's receivers in November, citing problems with debt, Cedenco's shareholding and governance.

Cedenco, which has operations in Gisborne, Hawke's Bay and Ohakune, could be sold either as a stand-alone business or in combination with sister companies in Australia - SK Foods Australia, Cedenco JV Australia and SS Farms Australia - which are also in receivership.

Cedenco's major shareholder, SK Foods International, in the United States initially hired law firm Kensington Swan to seek legal redress from ANZ, and said the receivership was without justification. SK Foods filed for bankruptcy in the US and was sold to Singaporean interests last year.

The Los Angeles Times has reported Frederick Scott Salyer, 54, former owner and chief executive of Cedenco's American parent, SK Foods, was arrested by FBI agents last week as he arrived at New York's John F Kennedy International Airport on a flight from London.

Salyer is expected to face fraud charges as part of an alleged scheme to dominate the market for tomato paste and other processed vegetables.

Federal prosecutors alleged in court papers that SK Foods used about $US330,000 in bribes from 1998 to 2008 to subvert competition and clinch deals to sell tomato paste, peppers and other products to companies including Kraft Foods, Safeway and B&G Foods, the LA Times reported.

FBI agents accused Salyer of 20 counts of mail and wire fraud linked to a maze of illegal schemes alleged to have been carried out between 1998 and 2008.

It is alleged that corporate customers, many of them senior executives of food industry giants, were bribed to buy misbranded products so full of mould they were not legally saleable in the US.

Salyer's lawyer, Malcolm Segal, told the newspaper the charges were unfounded and his client had been co-operating with investigators. But federal investigators claimed Salyer had tried to shelter millions of dollars in Caribbean and Liechtenstein banks and had been considering fleeing to a country to avoid extradition.

KordaMentha has said the Australian and NZ plants have never breached Australian and NZ food standards and have been innocently caught up in the FBI's investigation.

In a series of court proceedings starting in 2008, federal prosecutors in Sacramento have gained guilty pleas from eight of nine people they have accused of offences typically associated with organised crime: racketeering, collusion, bribery, money laundering and bid-rigging. Five of the people charged worked for SK Foods; four were employed by its customers.

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